Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Multi-million-dollar scams highlight value of trusted names

Glenn Freeman  |  22 Jun 2017Text size  Decrease  Increase  |  
Email to Friend

Page 1 of 1

Australians lost more than $300 million to scammers in 2016, according to research from the Australian Competition and Consumer Commission and Australian Cybercrime Online Reporting Network.


This figure is likely only the tip of the iceberg, with many victims not reporting their experiences. Indeed, another study from the Australian Bureau of Statistics, the Personal Fraud Survey, also conducted in 2016, puts the figure closer to $3 billion. The ACCC received more than 155,000 scam reports in 2016--a staggering 47 per cent increase on 2015 figures.

A four-fold increase in hacking scams is highlighted as one of the most concerning trends, with losses ballooning to $2.9 million in 2016, from $700,000 a year earlier. The growing digitisation of our economy is a key reason for this. Just as the digital economy presents many opportunities and efficiencies for consumers and businesses, it also increases the risk threshold.

These reports highlight the importance of dealing with trusted names when dealing with financial matters. Morningstar is an international business with operations in North America, Europe, Australia and Asia.

As an internationally registered business, it abides by stringent regulations in the handling of customer data and information. In local matters, these include adherence to the Privacy Act 1988 (Australia) and the Information Privacy Principles of the Privacy Act 1993 (New Zealand).

Scams targeting businesses are becoming increasingly sophisticated, using modern technology to make fake emails, invoices and websites appear legitimate--even to the most astute business person. These can have devastating consequences. Online scams--those executed via the internet, email, social networks, and mobile apps--outnumbered phone-based scams, with an increase of 130 per cent (72,105 reports) over 2015.

Email to Friend
Market News and Views Sign up today and receive our free Morning Note e-newsletter, daily in your inbox.

Losses to online scams accounted for 58 per cent ($48.4 million) of total losses. Social media was a particularly busy platform used by scammers to lure victims, netting losses of $9.5 million in 2016 compared to $3.8 million in 2015, with email-based scams also being highly lucrative.

According to Delia Rickard, deputy chair of the ACCC, staying on top of the "new and devious methods scammers use to contact victims" is a continuing challenge for the organisation and its counterparts.

Scams continue to come in many shapes and sizes. The WannaCry ransomware attacks that came to light in May this year are among the most recent high-profile incidents, which affected individuals and businesses across Europe and Asia.

Earlier this month, some 2,000 victims across Australia were defrauded of $30 million by an investment fraud syndicate. This involved cold calling people, and employing high-pressure sales tactics, offering huge returns on share market investments, or being involved in the laundering of victims' money.

These actions were supported by fake websites, containing bogus information about the financial products and companies. According to reports from ABC News, company names used by the syndicate included ESL, Eurosoft, OWS, OW Sydney, One Wealth, GTA, GlobalTech, GTA Australia, GT Australia, GT Alliance, TRP, TRP Solutions, Thorne Roberts Price, and Thomson Rowe Partners.

Acting Detective Superintendent Peter Brewer cautioned that consumers should exercise particular caution if being cold-called or pressured to financially commit, actions which "should ring alarm bells, and we highly recommend hanging up and having no further contact with those involved".

"Even if a person holds an Australian Financial Services Licence, we recommend seeking independent financial advice before committing to anything," he told ABC News.

More from Morningstar

Multi-billion-dollar Amazon deal a shot across bow

What type of global investor are you?

Make better investment decisions with Morningstar Premium | Free 4-week trial


Glenn Freeman is a Morningstar senior editor.

© 2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.

Email To Friend