Imagine being famous for losing $3.1 billion to scams in 2022 and you will get a sense for how Australians and their money are easily parted by scammers. This new international reputation may not be something we want to be well known for. Aussies are falling foul of investment scams at record levels and questions have to be asked as to why this is. Yes, these scams are much more sophisticated than previous types of phishing but there are basic flaws in the default position of many Australians. Gullibility and naivety when it comes to the internet speaks of a lack of education in the digital sphere. Too many assumptions about the trustworthiness of human nature when filtered through these digital mediums are costing individuals large sums of money.
A fool and his money is easily parted:
“If they pay a penie or two pence more for the reddinesse of them … let them looke to that, a foole and his money is soone parted.”
– Dr John Bridges, 1587
Yes, scams are nothing new and people have been conned out of their money by nefarious individuals since time immemorial. What has changed is the means and the ability for cybercriminals to take our money whilst remaining digitally hidden and safely ensconced a long way away. The advent of the internet has created a porous environment, where money can be moved around instantly to the detriment of security in terms of holding on to our assets.
Scammers Targeting Australians As Soft Touches
In addition, the advent of the digital age has changed our attitudes toward how we view our money and its mobility. Everything in the era of the internet is about convenience and making things easy. No more waiting around for cheques to clear. Instant transfers, as numbers move from accounts on screens. Unfortunately, this ease of accessibility also works for scammers and cybercriminals. Those once frustrating delays for hard copies to move from bank to bank provided time for safety checks in our transactions. Today, lightning fast means when your money is gone it’s gone. We have become soft touches for scammers because we have become accustomed to the digital transfer of funds. Money in large sums that individuals may have worked long and hard for is shifted at the touch of a screen. The old conception of bundles of crisp notes, which can be held in your hands. The smell and feel of hard currency is gone, replaced by intangible numbers on a digital screen. Easy come, easy go – is an old saying. Perhaps, a better analogy here would be – never really here, now gone.
Dumb Aussies Online Or Sophisticated Scams?
False words are not only evil in themselves, but they infect the soul with evil.”
The truth of the matter is that many Australians have never been properly trained in the use and understanding of the internet and world wide web. Individuals have picked it up without having a solid grounding in the protocols that the internet is built on. Australians receive emails purporting to be from names listed in the correspondent’s field and do not know to match this with the actual sender’s email address. Fake banners may be included in the body of the email, which copy the logo of whatever institution or company the phisher purports to be from. Sophisticated scammers today may have the correct email address to go with the rest of the fake livery. The hard and fast rule now must be to ignore all correspondence via email and SMS, which asks you to engage in this manner. If you have concerns contact the organisation but do not use any of the information provided in the email or text message, as this will be faked. Source the phone number yourself through your own bonafide records. We must all be extra vigilant around all these terribly convenient forms of communication. Modern technology has opened the doors to those in the grip of the worst aspects of human nature. Or another way of looking at it, is there are those out there who are using it to bring down our way of life.
“Australians are the most stupidest humans alive and they have a lot of money for no reason. A lot of money and no sense at all.”
– Russian hacker in Jessica Longbottom, ABC News 17 April 2023
You get a sense from this Russian hacker’s communication that he bears a level of disdain for Australians and our way of life. I pick up on this attitude from scammers toward their victims quite a bit from the available literature. There is a professed odium for their targets or marks. Maybe this helps them justify their actions and may perhaps be encouraged by the organisers. Understanding that these scammers and hackers are organised, just like businesses everywhere, is important too. They are businesses with levels of management in place to oversee their operations. They have revenue targets and bonus structures in place to reward high performance by operatives. The American business model, especially with regard to the call centre, has been co-opted by these organised crime entities. In many cases, these businesses may, indeed, have both legitimate and illegitimate departments operating simultaneously. One floor of a building houses scammers and on another floor a call centre outsourcing for a reputable corporation or organisation. This is particularly common in Asia where a lot of outsourcing for Western companies happens. These companies have trained these people in how to approach Americans and Australians – no wonder these scammers are so good at it. Investment scams have made up most of the $3.1 billion scammed from Australians in 2022.
East vs West Cyber War Raging
“Doris McAllister spent her whole life working hard to support herself. So, last year, when the 75-year-old saw an international bank offering a good return on deposits, she decided to transfer her life’s savings of $260,000 across to help secure her retirement. “I was feeling on top of the world because I thought, ‘Now I’m set for the rest of my life,'” she said.
“I don’t have to work. I don’t have to look over my shoulder for where the next dollar is going to come from.”
Six weeks later, when she needed to make a withdrawal, she realised she had been conned.
She now knows her money did not go to DBS, as she had intended, and thinks Commonwealth Bank should have done more to warn her before approving her transfer. Last November, her case was heard by the financial ombudsman, where the bank defended the actions its staff took in processing the 75-year-old’s bank transfer. The ombudsman ruled in the bank’s favour, saying it did all it was required to do.”
– Leonie Thorne, ABC News, 17 April 2023
Reading the above excerpt makes me feel sick and so sorry for Doris, the victim. The reality is that we are at war and the sooner all Australians realise this the better for all of us. What is happening in Ukraine and Russia is the flash point of a more insidious war that has been going on for some time. There is a cyber war happening between East and West. The Russians have been tacitly encouraging these cybercriminal organisations in their operations, as long as they target Western entities.
This has become more strident since the invasion of Ukraine and the financial sanctions imposed on Russia by Western governments. In a strange way, this is the first time that people like us, a long way from the front, can still feel the negative effects of war directly upon our lives. These criminal organisations will be paying Russia a fee for the protection afforded their activities and so some of the billions scammed from Australians will be funding the war in Ukraine. In the digital age, the holistic connections are like a spider’s web around the globe linking this financial network. Accountants and banks are complicit in setting these networks up. The financial sector is amoral at heart, where profits rule the roost and other considerations are secondary. Banks like HSBC have been prosecuted multiple times for money laundering on vast scales.
“US authorities defended their decision not to prosecute HSBC for accepting the tainted money of rogue states and drug lords on Tuesday, insisting that a $1.9bn fine for a litany of offences was preferable to the “collateral consequences” of taking the bank to court.”
– Dominic Rushe, The Guardian, 12 Dec 2012
“Numerous explanations have been offered for the failure of the Obama Justice Department to hold the big banks accountable: corporate lobbying in Washington, appeals-court rulings that tightened the definitions of certain types of corporate crime, the redirecting of investigative resources after 9/11. But Eisinger homes in on a subtler factor: the professional psychology of élite federal prosecutors. “The Chickenshit Club” is about a specific vocational temperament. When James Comey took over as the U.S. Attorney for the Southern District of New York, in 2002, Eisinger tells us, he summoned his young prosecutors for a pep talk. For graduates of top law schools, a job as a federal prosecutor is a brass ring, and the Southern District of New York, which has jurisdiction over Wall Street, is the most selective office of them all. Addressing this ferociously competitive cohort, Comey asked, “Who here has never had an acquittal or a hung jury?” Several go-getters, proud of their unblemished records, raised their hands.
But Comey, with his trademark altar-boy probity, had a surprise for them. “You are members of what we like to call the Chickenshit Club,” he said.”
– Patrick Radden Keefe, New Yorker, 24 July 2017
White collar crime, as we have seen in the examples illustrated in many of my articles in this series, is rarely criminally prosecuted in Western societies. Blue collar crimes committed by those from lower socioeconomic demographics, however, are always heavily punished by our judicial systems. Bankers, in particular, are a privileged elite who seem to walk on water when it comes to immunity from criminal prosecution for their crimes. What should we tell our children about this anomaly? Tell them to become bankers, I hear you say. Is hacking and scamming a white collar crime? A question for the ages, perhaps.
Aussie Billion Dollar Bunnies
“Evil is whatever distracts.”
– Franz Kafka
Australians and their money are easily parted – this is a conclusion easily reached on the basis of the billions lost to scammers in 2022. What can we do about it? What are we doing about it?
“Australians are being urged to learn how to spot a scam this national Scams Awareness Week (7-11 November) after combined losses of over $2 billion reported last year to Scamwatch, the government and the financial sector. This year combined losses might reach $4 billion as losses reported to Scamwatch are already significantly higher than 2021.
The ACCC’s Scamwatch received more than 166,000 reports between January and September this year, showing a 90 per cent increase in losses to $424.8 million over the same period last year. These numbers vastly understate real losses as only about 13 per cent of victims report to Scamwatch.”
– ACCC Media Release
Perhaps, a beauty pageant with the crowning of a Ms Scamwatch or a non-gender specific contest to draw attention to the indiscriminate nature of the scamming business. Seriously though folks, it is a big problem getting much bigger every day. Education is always the answer; and a free, nation-wide, cyber-security training program would not go astray. I could see that running out of libraries around the country. A sustained PR campaign on multiple platforms warning all Australians about the levels of sophistication now employed by scammers targeting Australians is, also, called for. Basically, you cannot trust anything presented online. Be a doubting Thomas, there is no place for faith online. Never assume anything to be ridgy didge. Investment schemes offering returns that seem too good to be true are dodgy. Be suspicious!!!
“Older Australians lost more to scams than any other group, with people aged 65 and over falling victim more frequently and losing more money. The frightening figures have prompted fresh calls by the consumer watchdog for the big banks to do more to protect their customers.”
– Leonie Thorne, ABC News, 17 April 2023
AI Making Scams More Sophisticated
The advent of ChatGPT and other AI bots are making scams more sophisticated. We used to be able to spot many phishing scams because the English was so bad but now scammers can get ChatGPT to write their emails and messages in perfect English. It will be much harder to spot the scams now. Make it your policy to refrain from directly responding to emails and SMS messages. If you are concerned contact the company from your own records – DO NOT USE ANY INFORMATION OR LINKS IN THE EMAIL OR TEXT.
Report Cyber Crime:
A Perfect Storm For Scamming
The pandemic and lockdowns played their part in, perhaps, producing a perfect storm for scamming opportunities in Australia and globally. More people were doing more stuff online and more of them were unfamiliar with the dangers of online transactions in terms of being scammed. The very Australian, ‘she’ll be right,’ attitude to life is not conducive to the careful qualities now demanded by the current climate. More scrutiny is called for than ever before over every little detail when utilising the internet. Don’t go online after a few alcoholic drinks because you are just asking for trouble. Inebriation reduces inhibitions and financial dealings demand diligent dissection of every detail. We are going to have to sacrifice our predilection for convenience in return for greater security. Online transactions will have to be privy to greater levels of regulation with more fail-safes in place, if we are going to stem the tide of money going to scammers.
“REvil – short for Ransomware Evil – was prolific in 2020 and 2021, carrying out dozens of attacks and raking in at least $US200 million. It tried to extort Apple by stealing drawings for new products, helped send currency exchange business Travelex into administration after locking up its systems, and threatened US and Australian food supply chains when it shut down JBS abattoirs.”
The Russian hacker quoted at the beginning of this piece, someone called Kerasid, according to the ABC article by John Lyons, Jessica Longbottom, and Jeanavive McGregor, claims to have led REvil. There are close links between REvil and the Russian state. REvil was involved in the Medibank hack here in Australia. The John Lyons expose of the hackers on Four Corners reveals that groups like Conti and REvil are renting out their malware to various organised crime syndicates to create ransom opportunities. It is estimated that 23% of businesses in Australia have paid ransoms to cybercriminals to get their online operations functioning again after being struck by malware. REvil is a new type of evil – a digital manifestation of a very old societal problem.
“Hell is empty and all the devils are here.”
– William Shakespeare
The Australian Financial Hall Of Shame
“Disgraced financial adviser Kris Ridgway extracted hundreds of thousands of dollars from investors while making illegal commissions, pocketing at least $1.6 million that allowed him to live the high life. The 53-year-old used his position at the Brisbane office of prestigious finance house Shaw and Partners as a middleman in a global scheme to lure unsophisticated investors to buy shares in unlisted companies with the expectation that they would soon be listed and deliver a windfall. But years later, the companies haven’t been listed.
Ridgway was sacked in February 2022 when Shaw and Partners learnt he had been pushing clients and friends into products it had not authorised or recommended. He then left his family high and dry with no explanation, only mounting bills and debt. Now he wants to confess. “I don’t want to think of myself as a crook but some of my actions in recent times have been terribly unlawful. I’m ashamed and sorry,” he tells an investigation by the Herald and 60 Minutes. “
– Adele Ferguson, SMH, 17 April 2023
The above entry, in the newly inaugurated Australian Hall of Financial Shame, is just a reminder that we have a fair few locally produced scumbags and Russia doesn’t have a mortgage on them. Money brings out the worst in a lot of people and greed is a very fundamental human trait. The frightening thing about the sophisticated hacking and scamming currently going on are the business structures and financial planning involved. This has turned it into a multi-billion dollar global business. Banks like HSBC and their ilk will, in all likelihood, be involved in such huge concerns. The amoral nature of high finance is a perennial problem for our societies and government regulators. Banks chasing profits continually cross the line, as we have seen in Australia with CBA and Westpac being fined millions for money laundering. Bankers see amounts of money with lots of zeroes and don’t want to look closely at where these funds originated from.
“No evil dooms us hopelessly except the evil we love, and desire to continue in, and make no effort to escape from.”
– George Eliot
Our greed for money fits the above definition of evil rather well, I posit. REvil and scammers prey upon gullible investors and the old adage about having eyes too big for your stomach springs to mind. If you have worked hard all your life for your savings why think that one throw of the dice on an investment is going to buck the trend and suddenly make you very rich. It is illogical thinking, to say the least. A fool and his or her money are easily parted, it seems. So many of us fall for very old tricks and then cry about how unfair it all is. In reality, we have to wake up from the land of Nod and sharpen our BS sensors.
How Do I Scam Thee? Let Me Count The Ways
“Hundreds of millions were also lost to remote-access scams, where a scammer gains control of a person’s computer or phone, and to payment redirection scams, where a scammer poses as a real business and sends invoices with fake bank details to victims. The true losses are likely to be far higher, with the ACCC estimating that at least 30 per cent of victims do not report what happened.”
– Leonie Thorne, ABC News, 17 April 2023
Australians and their money are easily parted by scammers. It is embarrassing and hurtful to be scammed. It can have us questioning ourselves and our competency to cope in today’s world. We can lose our faith in humanity and that is the key point, because those scamming us, are very likely, living a very different life to you and me. These long distance crimes put us in touch with individuals and organisations operating under entirely different circumstances. It is the trick of the internet that you can be in your living room, comfortably at home, and simultaneously communicating with someone or something in Asia or eastern Europe. Filters, either mechanical or language based, may prevent you from picking up on the true intention of the scammer. You have no body language to go on and we use body language to detect deception in others when meeting in the flesh. You are flying blind when conducting business online. Fraudulent behaviour is very easy to mask via the internet and digital devices. Scammers target vulnerabilities in our human nature. Loneliness and yearnings for love is one well-known soft spot for the scammer. Greed and the desire to get rich quick via investments is another. Australians must learn to discipline themselves when communicating online. It is advisable to come from a space of inviolability when dealing with strangers via the internet or your smart phone.
Anti-Scammer Rules To Abide By
1. Nobody you have never met before is your best friend.
2. Wise up and do not go looking for the milk of human kindness online.
3. Do not drink booze when fielding calls and communications.
4. Be extra vigilant at all times.
5. Don’t go looking for friends in the digital sphere.
It may seem harsh, but this is the current state of play in the virtual world. The modern sophisticated scams may be playing the long game or long con. That is they butter you up with solid advice to start with, make you think that you are onto a good thing before taking you for everything you are worth.
“Australians are the most stupidest humans.”
– Russian Hacker
Check Your Consumer Credit File For Identity Fraud
It pays to regularly, every 3 months, check your consumer credit report for signs of identity crime. The recent Latitude Financial Service’s hack involved 14 million stolen customer records, which included 7.9 million drivers licences and 53, 000 passport numbers. (AAP, The Guardian, 15 April 2023) Then, there were the Optus and Medibank data hacks. The prevalence of these ever increasing data breaches means that the likelihood of identity crime is growing almost exponentially.
Credit Reporting Agencies
Illion Ph. 1300 734 806
Experian Ph. 1300 783 684
Equifax Ph. 138 332
You can access a free copy of you credit file every 3 months from each of the credit reporting agencies. Indeed, if you have been refused credit you can get a copy immediately on that basis. We are living in very different times and things are only going to get worse on this score before they get any better. Stay on top of things by keeping up to date with the latest information about your own personal finances. If you find any errors on your credit report you can contact the lender and the credit bureau and request it be fixed. If you meet resistance on this there are consumer credit law specialists (such as ourselves) working in this field. An understanding of the governing legislation can, often, provide great assistance in achieving better outcomes and clarity for the future. It looks like Australia is headed for a recession on the back of the RBA’s inflation fighting monetary policy. Credit is becoming more expensive and harder to get. Now is the time to get your house in order when it comes to your finances. Understanding things like the timeframes involved in the negative listings on your credit report can smooth the way forward and engender greater peace of mind. No Win No Fee. A good lawyer can be worth his or her weight in gold. Credit reporting is governed by The Privacy Act 1988 (Cth) in Australia. A knowledge of the law equips your team with a better than fighting chance of achieving what you want from the issues and challenges facing your financial freedom.
Scams Are Here To Stay
Hacking and scamming is not going to go away anytime soon. These digitally based operations are exceedingly good value for underworld groups and figures. Russia, as a state sponsoring this kind of damaging activity for Western companies and institutions, enjoys the cost effectiveness of being able to paralyse its enemies via the internet. Mr Putin may not be definitively winning the war in Ukraine but his backing of groups like REvil and Conti continues to bear fruit for little cost in his ongoing war against the West. The openness and naivety of Australians when navigating their way around the digital space makes for plenty of low hanging fruit for cybercriminals and gangs. $3.1 billion lost to cybercrime in 2022 sounds like a lot of money and it may be much more, as not everyone puts their hand up after being scammed. A lot more Australians will be having conversations with family members warning them of the dangers inherent in the digital economy. Education and more cyber training is the best way to meet the perilous challenges ahead. More regulation and greater monitoring must be on the cards as well, if we are to reduce the ease in which cybercriminals currently operate. Banks must be heavily scrutinised for money laundering too, as these billions of dollars must be going somewhere if Kerasid, the Russian hacker, is to be believed. He stated that he moves back and forth between Russia and the UK. London is the bolthole for many nefarious criminals from Russia and elsewhere – perhaps the Poms could do something about this too. High finance fosters criminals around the globe because money talks and opens doors. Profit is always the bottom line.
AAP, Coles confirms its customers impacted by Latitude Financial Services data breach, 15 April 2023, Viewed 17 April 2023.
Australian Cyber Security Centre, ReportCyber, report and recover/report, Viewed 17 April 2023.
Ferguson Adele, Kris Ridgway promised investors huge profits – and never paid a cent. This is his confession, SMH, 16 April 2023, Viewed 17 April 2023.
Longbottom Jessica, Chatting with a hacker, ABC News, 17 April 2023, Viewed 17 April 2023.
Radden Keefe Patrick, Why Corrupt Bankers Avoid Jail, The New Yorker, 24 July 2017, Viewed 17 April 2023.
Rushe Dominic, HSBC’s record $1.9bn fine preferable to prosecution, US authorities insist, The Guardian, 12 Dec 2012, Viewed 17 April 2023.
Thorne Leonie, Australians lose record $3.1 billion to scams in 2022, as ACCC calls for tougher measures, ABC News, 17 April 2023, Viewed 17 April 2023.