tag:theconversation.com,2011:/au/topics/romance-scam-54356/articlesRomance scam – The Conversation2023-08-04T12:29:00Ztag:theconversation.com,2011:article/2101242023-08-04T12:29:00Z2023-08-04T12:29:00ZOnline romance scams: Research reveals scammers’ tactics – and how to defend against them<figure><img src="https://images.theconversation.com/files/540850/original/file-20230802-18-uz84g3.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C12125%2C7478&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sometimes, true love is too good to be true.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/illustration/romance-scam-dating-scam-cyber-crime-hacking-royalty-free-illustration/1304684845">kate3155/iStock via Getty Images</a></span></figcaption></figure><p>In the Netflix documentary “<a href="https://www.netflix.com/title/81254340">The Tinder Swindler</a>,” victims exposed notorious con artist <a href="https://www.deseret.com/entertainment/2023/1/17/23559144/the-tinder-swindler-where-is-simon-leviev-now">Simon Leviev</a>, who posed as a wealthy diamond mogul on the popular dating app Tinder to deceive and scam numerous women out of millions of dollars. Leviev is a flashy example of a dating scammer, but criminal operations also prey on emotionally vulnerable people to gain their trust and exploit them financially. </p>
<p>The internet has revolutionized dating, and there has been a <a href="https://www.liebertpub.com/doi/10.1089/cyber.2021.29219.editorial">surge in U.S. adults using apps to find ideal matches</a> post-pandemic. While these apps offer convenience for connecting with romantic partners, they also open the door to online romance scams. Criminals create both deceptive profiles and urgent scenarios to carry out the scam.</p>
<p>The Federal Trade Commission reports that <a href="https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2023/02/romance-scammers-favorite-lies-exposed">nearly 70,000 Americans fell victim to online romantic scams in 2022</a>, with reported losses topping US$1.3 billion. </p>
<p>Online romance scams exploit people through calculated online social engineering and deliberately deceptive communication tactics. In a series of research projects, my colleagues from <a href="https://ebcs.gsu.edu/">Georgia State University</a>, <a href="https://scholar.google.com/citations?hl=en&user=ecCbt3MAAAAJ">University of Alabama</a>, <a href="https://scholar.google.com/citations?hl=en&user=08ks5G0AAAAJ">University of South Florida</a> and I focused on understanding how scammers operate, the cues that may prompt changes in their tactics and what measures people can take to defend themselves against falling victim to this scam. </p>
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<figcaption><span class="caption">Simon Leviev, the ‘Tinder Swindler,’ conned several women by posing as a diamond mogul.</span></figcaption>
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<h2>How online romantic scams work</h2>
<p>Online romance scams are not coincidental. They’re carefully planned schemes that follow distinct stages. Research has <a href="https://doi.org/10.1057/sj.2012.57">identified five stages</a>: </p>
<ul>
<li>Baiting victims with attractive profiles. </li>
<li>Grooming victims with intimacy. </li>
<li>Creating crises to extract money.</li>
<li>On occasion manipulating victims with blackmail. </li>
<li>Revealing the scam. </li>
</ul>
<p>In short, scammers do not swindle victims by chance. They plan their actions in advance, patiently following their playbooks to ensure profitable outcomes. Scammers worm their way into a victim’s heart to gain access to their money through false pretenses.</p>
<p>In a previous study, my colleague <a href="https://scholar.google.com/citations?user=wHPMweEAAAAJ&hl=en">Volkan Topalli</a> and I analyzed victim testimonials from the website stop-scammers.com. Our research revealed scammers’ use of <a href="https://doi.org/10.1007/s12103-022-09706-4">various social engineering techniques and crisis stories</a> to prompt urgent requests. Scammers leveraged social norms, guilt and supposed emergencies to manipulate victims. Scammers also paid close attention to communication patterns and adapted their tactics based on victims’ responses. This interplay significantly influenced the overall operation of the scam. </p>
<p>Across the globe, online romance scammers use different techniques that vary across cultures to successfully defraud victims. In my recent research, for example, I looked closely into an <a href="https://doi.org/10.1080/15564886.2022.2051109">online romance scam in China</a> called “Sha Zhu Pan,” which loosely translates to “Pig Butchering Scam.” In Sha Zhu Pan, scammers bait and groom victims for financial exploitation through well-structured group setups. Multiple scammers across four groups – hosts, resources, IT and money laundering – persuade victims through romantic tactics to invest in fake apps or use fake gambling websites, convincing them to pay more and more without ever receiving their money back. Hosts interact with victims, resources members identify targets and collect information about them, IT creates the fake apps and websites, and the money launderers process the ill-gotten gains.</p>
<h2>Deterrence and rewards</h2>
<p>Like <a href="https://doi.org/10.1093/bjc/42.2.337">street robbers</a>, online romance scammers can be influenced both positively and negatively by a range of situational cues that serve as incentives or deterrents. </p>
<p>Our investigation showed that deterrent messages <a href="http://dx.doi.org/10.21428/cb6ab371.c6eae022">can significantly affect scammers’ behavior</a>. Here’s an example of a deterrent message: “I know you are scamming innocent people. My friend was recently arrested for the same offense and is facing five years in prison. You should stop before you face the same fate.” Based on live conversations with active scammers online, our recent analysis suggests that receiving deterrent messages reduced scammers’ response rate and their use of certain words, and increased the likelihood that when they sought further communications, they admitted they had done something wrong. </p>
<p>Our observations indicate that scammers not only <a href="https://doi.org/10.1080/01639625.2023.2197547">diversify their approaches</a> to prompt more responses, such as appealing to their romantic relationships, asking for identifying information and requesting victims switch to private chat platforms, but they also use several techniques for getting victims to <a href="https://www.crimrxiv.com/pub/zgfxej63">overcome their misgivings</a> about sending the scammers more money. For example, scammers subtly persuade victims to see themselves as holding more power in the interaction than they do. </p>
<h2>Blocking scammers</h2>
<p>There are methods that could help users defend against online romance scams. </p>
<p>In experimental findings, my colleagues and I suggest online apps, especially dating apps, implement warning messages. An example would be applying linguistics algorithms to identify keywords like “money,” “MoneyGram” and “bank” in conversations to alert potential victims of the scam and deter scammers from engaging further. </p>
<p>In addition, apps can use tools to detect counterfeit profile pictures and other types of image fraud. By concentrating on identifying scammers’ use of counterfeit profile pictures, this advanced algorithm holds the potential to preemptively hinder scammers from establishing fake profiles and initiating conversations from the outset. </p>
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<figcaption><span class="caption">The FBI gives advice on how to protect yourself from romance scams.</span></figcaption>
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<h2>How to protect yourself</h2>
<p>Online dating app users can take precautions when talking to strangers. There are five rules users should follow to steer clear of scammers: </p>
<ol>
<li>Avoid sharing financial information with or sending money to strangers. </li>
<li>Refrain from sending private photos to strangers. </li>
<li>Pay attention to spelling and grammar because scammers often claim to reside in English-speaking countries when they actually operate in non-Western countries. </li>
<li>Use image and name-reverse searches.</li>
<li>Confide in family and friends if you grow suspicious. </li>
</ol>
<p>One last piece of advice to empower those who have fallen victim to online romance scams: Don’t blame yourself. </p>
<p>Take the courageous step of breaking free from the scam and seek support. Reach out to your loved ones, trustworthy third-party organizations and law enforcement agencies for help. This support network is essential in helping you restart your life and move forward.</p><img src="https://counter.theconversation.com/content/210124/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Fangzhou Wang does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Dating apps have given an ancient profession, confidence scamming, a high-tech boost.Fangzhou Wang, Assistant Professor of Criminology and Criminal Justice, University of Texas at ArlingtonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2040182023-04-21T03:39:42Z2023-04-21T03:39:42ZAustralians lost more than $3bn to scammers in 2022. Here are 5 emerging scams to look out for<figure><img src="https://images.theconversation.com/files/522269/original/file-20230421-15-jncq5b.png?ixlib=rb-1.1.0&rect=228%2C213%2C1377%2C1003&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Facebook</span></span></figcaption></figure><p>The Australian Competition and Consumer Commission’s latest <a href="https://www.accc.gov.au/system/files/Targeting%20scams%202022.pdf">Targeting Scams report</a> indicates Australians reported more than A$3 billion lost to fraud in 2022. This is about a $1 billion increase on <a href="https://theconversation.com/australians-lost-2b-to-fraud-in-2021-this-figure-should-sound-alarm-bells-for-the-future-186459">reported losses from 2021</a>. </p>
<p>Year upon year, we’re witnessing a rise in monetary losses to fraud. Behind these figures sit millions of Australians who experience a range of financial and non-financial <a href="https://www.aic.gov.au/sites/default/files/2020-05/29-1314-FinalReport.pdf">harms</a>. </p>
<p>Here’s what we’ve learned from the latest report – and some advice on what to look out for in the year ahead. </p>
<h2>2022 at a glance</h2>
<p>Of the reported $3 billion lost, about half was stolen as part of investment schemes – more than double the $701 million figure from 2021. A desire to invest in cryptocurrency has driven up these losses, with potential investors inadvertently transferring money to offenders advertising a range of falsehoods. </p>
<p>Remote access schemes – in which a scammer convinces the victim to grant them access to their computer – jumped into second place, with $229 million in reported losses. This was followed by payment redirection scams (also known as business email compromise fraud). </p>
<p>Those who reported directly to Scamwatch lost an average of $19,654 – an increase of 54% from the $12,742 reported in 2021. </p>
<p>The report also shows not all victims are targeted equally; people aged 65 years and older reported the highest losses across all demographics. Indigenous Australians, people with a disability, and those from culturally and linguistically diverse backgrounds were also overrepresented.</p>
<p>For the first time in many years, text message was the most popular method for offenders to target victims. And while bank transfers were the most popular way to send funds to offenders, <a href="https://theconversation.com/crypto-theft-is-on-the-rise-heres-how-the-crimes-are-committed-and-how-you-can-protect-yourself-176027">cryptocurrency transfers</a> continue to increase in popularity – rising 162.4% in one year. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/522276/original/file-20230421-2632-p8wwc0.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/522276/original/file-20230421-2632-p8wwc0.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/522276/original/file-20230421-2632-p8wwc0.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=286&fit=crop&dpr=1 600w, https://images.theconversation.com/files/522276/original/file-20230421-2632-p8wwc0.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=286&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/522276/original/file-20230421-2632-p8wwc0.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=286&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/522276/original/file-20230421-2632-p8wwc0.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=360&fit=crop&dpr=1 754w, https://images.theconversation.com/files/522276/original/file-20230421-2632-p8wwc0.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=360&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/522276/original/file-20230421-2632-p8wwc0.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=360&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Scammers are always looking for new ways to deceive people, and this often involves trying to build rapport.</span>
<span class="attribution"><span class="source">Michael Lucy</span></span>
</figcaption>
</figure>
<p>There was, however, a reduction in fraudulent phone calls. This is likely attributable to the introduction of <a href="https://www.commsalliance.com.au/__data/assets/pdf_file/0015/72150/C661_2022.pdf">regulatory action</a> to block known scam calls. It’s a bright spot in an otherwise dark report.</p>
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Read more:
<a href="https://theconversation.com/scammers-can-slip-fake-texts-into-legitimate-sms-threads-will-a-government-crackdown-stop-them-200644">Scammers can slip fake texts into legitimate SMS threads. Will a government crackdown stop them?</a>
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<h2>Trends to look out for</h2>
<p>The Targeting Scams report demonstrates the many ways offenders seek to defraud victims. On one hand, people are becoming more aware of common scam tactics. On the other, criminals are adjusting their methods to gain the upper hand. </p>
<p>Here are five types of relatively lesser-known frauds everyone should be aware of.</p>
<p><strong>1. Romance baiting</strong></p>
<p>Also known as “<a href="https://news.sophos.com/en-us/2021/05/12/fake-android-and-ios-apps-disguise-as-trading-and-cryptocurrency-apps/">cryptorom</a>” or “<a href="https://krebsonsecurity.com/2022/07/massive-losses-define-epidemic-of-pig-butchering/">pig butchering</a>”, this scam is a convergence of investment fraud and traditional romance fraud approaches. </p>
<p>The offender first initiates a relationship with the victim – through dating apps, websites or social media platforms. Once they’ve established trust, they encourage the victim to put their money into an “investment” opportunity, often cryptocurrency. The victim will then unknowingly transfer their money to the offender, who is under a different guise. </p>
<p>This kind of romance baiting raises fewer red flags than directly asking for money, and is targeting a younger demographic compared to more traditional romance fraud. </p>
<p>Such deceptions are coded under investment schemes. This is likely driving the surge in investment scheme losses reported in recent years, while also accounting for a lack of substantial increases in romance fraud.</p>
<p><strong>2. Online shopping fraud</strong></p>
<p>Offenders are skilled at creating fake websites and product advertisements that look genuine.</p>
<p>Often these fake sites will have only subtle differences from their real counterparts. Consumers may not be able to tell the difference. Criminals can directly access funds through victims’ credit card details obtained on these sites. </p>
<p>Online shopping fraud targets a range of demographics. It’s happening on stand-alone websites, social media platforms and online marketplaces.</p>
<p><strong>3. Jobs and employment fraud</strong></p>
<p><a href="https://research.qut.edu.au/centre-for-justice/wp-content/uploads/sites/304/2022/02/Briefing-Paper-Series-Feb2022-Issue21-17022022.pdf">Research</a> has indicated that working from home and flexible working conditions are strong indicators of a fraudulent job listing.</p>
<p>But in a post-COVID world, flexibility at work is often a key criterion for job seekers, if not a deal-breaker. Offenders have noticed this, and are responding by posting attractive job advertisements that offer flexibility and high incomes. </p>
<p>Victims submit their CVs and personal credentials (setting themselves up for identity crime), or may be required to pay upfront for training or materials costs for a job that doesn’t exist. </p>
<p>Employment scams are targeting younger people in particular, as they’re more likely to have <a href="https://australiainstitute.org.au/report/youth-unemployment-and-the-pandemic/">experienced job loss and insecurity</a> in the wake of the pandemic. </p>
<p><strong>4. Recovery schemes</strong></p>
<p>Many fraud victims will want to take whatever action possible to recover lost funds. </p>
<p>To exploit this, offenders will trade the details of victims with each other. They will then pose as authorities (often law enforcement, banks or private agencies) who are aware of the victim’s circumstances and promote their ability to regain the missing funds for a fee. </p>
<p>In this way, victims who are desperate to recover losses are manipulated into paying even more money to offenders.</p>
<p><strong>5. Remote access schemes</strong></p>
<p>Receiving a phone call from a computer technician advising of a problem with your computer and offering to fix it is a common experience for many. While this approach isn’t new, it made a strong resurgence in 2022 – particularly targeting older people. </p>
<p>These scam calls often come through landlines and prey on people’s fear for the security of their bank details and other personal data. The fraudsters often invoke a sense of urgency about needing to rectify the “problem”, and victims are persuaded to give the offender remote access to their computer. </p>
<p>The criminal can then access a wealth of personal information. They can gain direct entry to bank accounts to transfer funds, and can access identity credentials and other sensitive details to commit identity crime in the future. </p>
<h2>Change is needed to protect the public</h2>
<p>The threat of fraud will only increase alongside technological evolution. Experts are concerned about artificial intelligence tools such as <a href="https://www.theguardian.com/technology/2023/mar/08/darktrace-warns-of-rise-in-ai-enhanced-scams-since-chatgpt-release">ChatGPT</a> and image and video generators giving cybercriminals yet another tool to add to their arsenal.</p>
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Read more:
<a href="https://theconversation.com/scams-deepfake-porn-and-romance-bots-advanced-ai-is-exciting-but-incredibly-dangerous-in-criminals-hands-199004">Scams, deepfake porn and romance bots: advanced AI is exciting, but incredibly dangerous in criminals' hands</a>
</strong>
</em>
</p>
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<p>The latest Scamwatch report is further evidence banks and financial institutions need to implement measures to help reduce fraud losses; among these, the checking of account names against BSB numbers for all transactions. The UK has a <a href="https://www.ukfinance.org.uk/policy-and-guidance/guidance/confirmation-payee">confirmation-of-payee</a> policy that does this. </p>
<p>The government is attempting to address the continued surge in fraud losses through the revision of its <a href="https://www.homeaffairs.gov.au/about-us/our-portfolios/cyber-security/strategy/2023-2030-australian-cyber-security-strategy">cybersecurity strategy</a> and the potential establishment of a <a href="https://consultation.accc.gov.au/accc/national-anti-scams-centre-survey/">National Anti-Scams Centre</a>. </p>
<p>These are both positive steps but it’s clear there’s a need for more work to be done.</p>
<p><em>If you or someone you know has been a victim of fraud, you can report it to <a href="https://www.cyber.gov.au/report-and-recover/report">ReportCyber</a>. For support, contact <a href="https://www.idcare.org/">iDcare</a>. For prevention advice, consult <a href="https://www.scamwatch.gov.au/">Scamwatch</a>.</em></p><img src="https://counter.theconversation.com/content/204018/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cassandra Cross has previously received funding from the Australian Institute of Criminology and the Cybersecurity Cooperative Research Centre.</span></em></p>Losses have surged, and change is needed to better protect Australians into the future.Cassandra Cross, Associate Dean (Learning & Teaching) Faculty of Creative Industries, Education and Social Justice, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1864592022-07-06T03:27:57Z2022-07-06T03:27:57ZAustralians lost $2b to fraud in 2021. This figure should sound alarm bells for the future<figure><img src="https://images.theconversation.com/files/472693/original/file-20220706-25-cr1xjq.jpeg?ixlib=rb-1.1.0&rect=49%2C71%2C4686%2C3081&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Australian consumers and businesses lost more than A$2 billion to scams in 2021, according to the Australian Competition and Consumer Commission’s (ACCC) annual Targeting Scams <a href="https://www.accc.gov.au/publications/targeting-scams-report-on-scam-activity">report</a> released on Monday. This figure should sounds alarm bells – it’s more than double the $851 million reported lost in 2020.</p>
<p>The increase in losses was primarily driven by a doubling of investment fraud losses, from $328 million to $701 million, and a substantial increase in payment redirection fraud, from $128 million to $227 million. Scamwatch alone received more than 286,000 reports.</p>
<p>So what does the latest report tell us about the current state of play for fraud in Australia? And perhaps more importantly, what can be done?</p>
<h2>The rise of crypto scams</h2>
<p>Cryptocurrencies have played a major role in fraud losses this year. They’re largely responsible for the surge in investment fraud losses, with many victims being persuaded to invest their funds in fake or non-existent crypto schemes.</p>
<p>The request to invest funds in a crypto scheme raises fewer red flags than a request to directly send money to someone. In the former, the victim believes they’re potentially making genuine returns. </p>
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<a href="https://images.theconversation.com/files/472694/original/file-20220706-17-t1z57l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/472694/original/file-20220706-17-t1z57l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/472694/original/file-20220706-17-t1z57l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=343&fit=crop&dpr=1 600w, https://images.theconversation.com/files/472694/original/file-20220706-17-t1z57l.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=343&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/472694/original/file-20220706-17-t1z57l.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=343&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/472694/original/file-20220706-17-t1z57l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=431&fit=crop&dpr=1 754w, https://images.theconversation.com/files/472694/original/file-20220706-17-t1z57l.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=431&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/472694/original/file-20220706-17-t1z57l.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=431&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Cryptocurrencies are still new and somewhat of a novelty, and offenders can leverage this to exploit victims.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>Cryptocurrencies have become the most popular payment method across all fraud types. This is likely due to the difficulty of tracking crypto payments. </p>
<p>Cryptocurrency is also having a significant impact on romance fraud. Romance fraud itself appears steady – with victims reporting $142 million lost in 2021, compared to $131 million in 2020. </p>
<p>However, offenders are increasingly using these fake online relationships as a recruitment mechanism for attracting investments in fraudulent crypto schemes. This is known as “<a href="https://www.accc.gov.au/media-release/romance-baiting-scams-on-the-rise">romance baiting</a>” or “<a href="https://news.sophos.com/en-us/2022/03/16/cryptorom-bitcoin-swindlers-continue-to-target-vulnerable-iphone-and-android-users/">cryptorom</a>”.</p>
<h2>Who are the victims?</h2>
<p>Research indicates all demographics are vulnerable to fraud, but not all are <em>equally</em> vulnerable. 2021 saw increased losses for older people, Indigenous Australians, people from culturally and linguistically diverse (CALD) communities and those with a disability. </p>
<p>For example, people aged 65 and older reported $82 million lost, up from $38 million the year before. It’s clear the most vulnerable in society are being hugely impacted. </p>
<p>Businesses are also being decimated through payment redirection schemes, or “<a href="https://eprints.qut.edu.au/200621/">business email compromise fraud</a>”. In these cases, offenders infiltrate businesses and intercept payments and invoices from customers and suppliers. This can result in severe financial losses, as seen in the <a href="https://www.abc.net.au/news/science/2022-04-24/scammers-hackers-real-estate-deposit-property-settlement/101000288">real estate</a> industry.</p>
<h2>The ongoing impacts of COVID</h2>
<p>The COVID-19 pandemic has been a significant disruptor since March 2020. Lockdowns and isolation requirements have driven a global shift towards online activity. Cybercrime has flourished – and fraud is no exception.</p>
<p>The pandemic impacted fraud in several ways. There are COVID-themed frauds targeting Australians, with a focus on <a href="https://www.scamwatch.gov.au/types-of-scams/current-covid-19-coronavirus-scams/covid-19-vaccination-scams">vaccines</a>, personal protective equipment and <a href="https://www.servicesaustralia.gov.au/text-message-scam-for-free-covid-19-test-kit">contact tracing</a>. There are also <a href="https://www.choice.com.au/outdoor/pets/products/articles/pet-scams">pet scams</a> trying to capitalise on people’s desire to purchase furry, four-legged companions.</p>
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Read more:
<a href="https://theconversation.com/fake-covid-19-testing-kits-and-lockdown-puppy-scams-how-to-protect-yourself-from-fraud-in-a-pandemic-144060">Fake COVID-19 testing kits and lockdown puppy scams: how to protect yourself from fraud in a pandemic</a>
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<p>The pandemic also shifted the fraud profile of the Australian population. The continual state of anxiety that has characterised the past two-and-a-half years, coupled with financial and relational strain, has people worn-down. </p>
<p>This means fraud approaches that may not have worked prior to the pandemic are now more likely to succeed. And this provides a context to understanding the massive losses in 2021. </p>
<h2>What can we expect now?</h2>
<p>Despite the magnitude of losses reported, the sad reality is very few of these reports will result in consumers getting their money back. Even fewer will result in a <a href="https://eprints.qut.edu.au/135582/8/ACORN_deidentified_submitted.pdf">criminal justice outcome</a>. This will leave most victims frustrated and angry with the legal system having not met their expectations.</p>
<p>Fraud poses distinct <a href="https://theconversation.com/theres-a-gap-between-what-people-expect-when-they-report-cybercrime-and-what-police-can-deliver-102781">challenges for police</a> and other agencies. Offenders don’t use their real identities and will often commit offences across multiple jurisdictions, making it difficult to catch and prosecute them.</p>
<p>Disruption and prevention are the key to making any inroads in reducing fraud losses. This is challenging work, and arguably more must be done given the recent escalation in losses. </p>
<h2>A collective responsibility</h2>
<p>It’s important to remember that behind the statistics are individuals who have lost money and, in many cases, suffered considerably. The impact of fraud isn’t restricted to financial loss; it reverberates across the physical, emotional and relational aspects of our lives.</p>
<p>Prevention advice for individuals is to remain vigilant, ask questions and do their own research. Having strong passwords and up-to-date software are important, but will do little to deter a motivated offender. </p>
<p>Fraud is largely a human problem. So we need to better understand the psychological techniques used by offenders and develop targeted ways to fight back.</p>
<p>It’s also time the government took fraud more seriously and invested resources and expertise into reducing losses to individuals, businesses and society at large. Australia currently has no current co-ordinated fraud strategy to mitigate, prevent or respond to losses. </p>
<p>There is a clear need to develop better education and prevention materials that account for the diversity in victimisation. Knowing that certain demographics are more likely to be victimised highlights the need to create resources tailored to these individuals. </p>
<p>The latest ACCC report should be an unmissable warning sign. On its current path, Australia is headed for even greater losses than the $2 billion mentioned above. At what point will we finally act?</p>
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<strong>
Read more:
<a href="https://theconversation.com/beware-of-bushfire-scams-how-fraudsters-take-advantage-of-those-in-need-129549">Beware of bushfire scams: how fraudsters take advantage of those in need</a>
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<img src="https://counter.theconversation.com/content/186459/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cassandra Cross has previously received funding from a variety of government and non-government organisations. </span></em></p>2021 saw particularly higher losses for vulnerable demographics. The numbers are startling – and the government arguably isn’t doing enough.Cassandra Cross, Associate Dean (Learning & Teaching) Faculty of Creative Industries, Education and Social Justice, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1820332022-06-21T11:47:15Z2022-06-21T11:47:15ZScams and cryptocurrency can go hand in hand – here’s how they work and what to watch out for<figure><img src="https://images.theconversation.com/files/469023/original/file-20220615-25-5sc87d.jpg?ixlib=rb-1.1.0&rect=17%2C26%2C5779%2C3966&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The anonymous nature of cryptocurrency transactions is ideal for con artists.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/hacker-stealing-password-and-identity-computer-royalty-free-image/992840396">seksan Mongkhonkhamsao/Moment via Getty Images</a></span></figcaption></figure><p>When one of our students told us they were going to drop out of college in August 2021, it wasn’t the first time we’d heard of someone ending their studies prematurely.</p>
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<iframe id="noa-web-audio-player" style="border: none" src="https://embed-player.newsoveraudio.com/v4?key=x84olp&id=https://theconversation.com/scams-and-cryptocurrency-can-go-hand-in-hand-heres-how-they-work-and-what-to-watch-out-for-182033&bgColor=F5F5F5&color=D8352A&playColor=D8352A" width="100%" height="110px"></iframe>
<p><em>You can listen to more articles from The Conversation, narrated by Noa, <a href="https://theconversation.com/us/topics/audio-narrated-99682">here</a>.</em></p>
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<p>What was new, though, was the reason. The student had become a victim of a cryptocurrency scam and had lost all their money – including a bank loan – leaving them not just broke, but in debt. The experience was financially and psychologically traumatic, to say the least.</p>
<p>This student, unfortunately, is not alone. Currently there are hundreds of millions of cryptocurrency owners, with <a href="https://assets.ctfassets.net/hfgyig42jimx/5i8TeN1QYJDjn82pSuZB5S/85c7c9393f3ee67e456ec780f9bf11e3/Cryptodotcom_Crypto_Market_Sizing_Jan2022.pdf">estimates predicting further rapid growth</a>.
As the number of people owning cryptocurrencies has increased, so has the number of scam victims. </p>
<p>We study <a href="https://scholar.google.com/citations?hl=en&user=tLkeURsAAAAJ">behavioral economics</a> and <a href="https://scholar.google.com/citations?hl=en&view_op=list_works&gmla=AJsN-F4Duqf9w-yRoxI_zWEQFHqsNVBbjyTuzE_DcB9qQZd43DA-MXVCyxnE5gPF2STCeZGNVUb9yS-Dw3pwJFdrL22oit3ZKA&user=NsBe-cYAAAAJ">psychology</a> – and recently published a <a href="https://www.routledge.com/A-Fresh-Look-at-Fraud-Theoretical-and-Applied-Perspectives/Hanoch-Wood/p/book/9780367861445">book about the rising problem of fraud, scams and financial abuse</a>. There are reasons why cryptocurrency scams are so prevalent. And there are steps you can take to reduce your chances of becoming a victim.</p>
<h2>Crypto takes off</h2>
<p>Scams are not a recent phenomenon, with <a href="https://www.routledge.com/A-Fresh-Look-at-Fraud-Theoretical-and-Applied-Perspectives/Hanoch-Wood/p/book/9780367861445">stories about them dating back to biblical times</a>. What has fundamentally changed is the ease by which scammers can reach millions, if not billions, of individuals with a press of a button. The internet and other technologies have simply changed the rules of the game, with cryptocurrencies coming to epitomize the leading edge of these <a href="https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams">new cybercrime opportunities</a>. </p>
<p>Cryptocurrencies – which are <a href="https://www.coindesk.com/learn/what-is-cryptocurrency/">decentralized, digital currencies that use cryptography to create anonymous transactions</a> – were originally driven by “<a href="https://nakamoto.com/the-cypherpunks/">cypherpunks,” individuals concerned with privacy</a>. But they have expanded to capture the minds and pockets of everyday people and criminals alike, especially during the COVID-19 pandemic, when <a href="https://harbert.auburn.edu/news/is-cryptocurrency-going-mainstream-yes-but-theres-more-to-the-story.html">the price of various cryptocurrencies shot up and cryptocurrencies became more mainstream</a>. <a href="https://www.bitdefender.com/blog/hotforsecurity/fake-covid-19-cryptocurrency-emerges-promising-to-gain-value-with-each-death">Scammers capitalized on their popularity</a>. The pandemic also caused a disruption to mainstream business, <a href="https://doi.org/10.1016/j.frl.2021.102049">leading to greater reliance on alternatives such as cryptocurrencies</a>. </p>
<p>A January 2022 report by <a href="https://www.chainalysis.com/">Chainanalysis</a>, a blockchain data platform, suggests <a href="https://blog.chainalysis.com/reports/2022-crypto-crime-report-introduction/">in 2021 close to US$14 billion was scammed</a> from investors using cryptocurrencies. </p>
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<p>For example, in 2021, two brothers from South Africa managed to <a href="https://www.bloomberg.com/news/articles/2021-06-23/s-african-brothers-vanish-and-so-does-3-6-billion-in-bitcoin">defraud investors of $3.6 billion</a> from a cryptocurrency investment platform. In February 2022, the FBI announced it had arrested a couple who used a fake cryptocurrency platform to <a href="https://www.euronews.com/next/2022/02/09/us-couple-arrested-for-alleged-fraud-after-3-6-billion-stolen-bitcoin-seized-in-a-record-h">defraud investors of another $3.6 billion</a> </p>
<p>You might wonder how they did it. </p>
<h2>Fake investments</h2>
<p>There are two main types of cryptocurrency scams that tend to target different populations. </p>
<p>One targets cryptocurrency investors, who tend to be <a href="https://doi.org/10.1093/rof/rfab034">active traders holding risky portfolios</a>. They are mostly younger investors, under 35, who <a href="https://blog.bitpanda.com/en/understanding-cryptocurrency-holders-in-europe">earn high incomes, are well educated and work in engineering, finance or IT</a>. In these types of frauds, scammers create fake coins or fake exchanges. </p>
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<p>A recent example is SQUID, a cryptocurrency coin named after the TV drama “Squid Game.” After the new coin skyrocketed in price, its creators <a href="https://www.cnn.com/2021/11/01/investing/squid-game-cryptocurrency-scam/index.html">simply disappeared with the money</a>. </p>
<p>A variation on this scam involves enticing investors to be among the first to purchase a new cryptocurrency – a process called an initial coin offering – with promises of large and fast returns. But unlike the SQUID offering, no coins are ever issued, and would-be investors are left empty-handed. In fact, <a href="https://research.bloomberg.com/pub/res/d28giW28tf6G7T_Wr77aU0gDgFQ">many initial coin offerings turn out to be fake</a>, but because of the complex and evolving nature of these new coins and technologies, even educated, experienced investors can be fooled. </p>
<p>As with all risky financial ventures, anyone considering buying cryptocurrency should follow the age-old advice to thoroughly research the offer. Who is behind the offering? What is known about the company? Is a white paper, an informational document issued by a company outlining the features of its product, available? </p>
<p>In the SQUID case, one warning sign was that investors who had bought the coins were unable to sell them. The SQUID website was also riddled with grammatical errors, which is typical of many scams. </p>
<h2>Shakedown payments</h2>
<p>The second basic type of cryptocurrency scam simply uses cryptocurrency as the payment method to transfer funds from victims to scammers. All ages and demographics can be targets. These include ransomware cases, romance scams, computer repair scams, sextortion cases, Ponzi schemes and the like. Scammers are simply capitalizing on the anonymous nature of cryptocurrencies to hide their identities and evade consequences.</p>
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<a href="https://images.theconversation.com/files/469076/original/file-20220615-14-58glsr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Close-up of man's fingers typing an 'I love you' text message on a mobile phone." src="https://images.theconversation.com/files/469076/original/file-20220615-14-58glsr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/469076/original/file-20220615-14-58glsr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=376&fit=crop&dpr=1 600w, https://images.theconversation.com/files/469076/original/file-20220615-14-58glsr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=376&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/469076/original/file-20220615-14-58glsr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=376&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/469076/original/file-20220615-14-58glsr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/469076/original/file-20220615-14-58glsr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/469076/original/file-20220615-14-58glsr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Romance frauds often result in requests for cryptocurrency.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/sending-i-love-you-text-message-with-mobile-phone-royalty-free-image/1158779123">Tero Vesalainen/iStock via Getty Images</a></span>
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<p>In the recent past, scammers would request wire transfers or gift cards to receive money – as they are irreversible, anonymous and untraceable. However, such payment methods do require potential victims to leave their homes, where they might encounter a third party who can intervene and possibly stop them. Crypto, on the other hand, can be purchased from anywhere at any time. </p>
<p>Indeed, Bitcoin has become the most common currency requested in ransomware cases, <a href="https://blog.emsisoft.com/en/33977/is-ransomware-driving-up-the-price-of-bitcoin/#:%7E:text=Bitcoin%20accounted%20for%20about%2098,part%20of%20the%20ransomware%20model">being demanded in close to 98% of cases</a>. According to the U.K. National Cyber Security Center, sextortion scams often request individuals to <a href="https://www.ncsc.gov.uk/guidance/sextortion-scams-how-to-protect-yourself">pay in Bitcoin and other cryptocurrencies</a>. Romance scams targeting younger adults are <a href="https://www.ncsc.gov.uk/guidance/sextortion-scams-how-to-protect-yourself">increasingly using cryptocurrency</a> as part of the scam. </p>
<p>If someone is asking you to transfer money to them via cryptocurrency, you should see a giant red flag. </p>
<h2>The Wild West</h2>
<p>In the field of financial exploitation, more work has been done to study and educate elderly scam victims, because of the <a href="https://doi.org/10.1007/s11606-014-2946-2">high levels of vulnerability in this group</a>. Research has identified common traits that make someone especially vulnerable to scam solicitations. They include <a href="https://doi.org/10.1177/0963721421995489">differences in cognitive ability, education, risk-taking and self-control</a>.</p>
<p>Of course, younger adults can also be vulnerable and indeed are becoming victims, too. There is a clear need to broaden education campaigns to include all age groups, including young, educated, well-off investors. We believe authorities need to step up and employ new methods of protection. For example, the regulations that currently apply to financial advice and products could be extended to the cryptocurrency environment. Data scientists also need to better track and trace fraudulent activities. </p>
<p>Cryptocurrency scams are especially painful because the probability of retrieving lost funds is close to zero. For now, cryptocurrencies have no oversight. They are simply the Wild West of the financial world.</p><img src="https://counter.theconversation.com/content/182033/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>From initial coin offerings that are totally fake to fraudsters demanding payments in crypto, scams involving cryptocurrencies are on the rise. Two experts explain why – and how to protect yourself.Yaniv Hanoch, Associate Professor in Risk Management, University of SouthamptonStacey Wood, Professor of Psychology, Scripps CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1760272022-02-03T05:59:33Z2022-02-03T05:59:33ZCrypto theft is on the rise. Here’s how the crimes are committed, and how you can protect yourself<figure><img src="https://images.theconversation.com/files/444197/original/file-20220203-17-bixps8.jpeg?ixlib=rb-1.1.0&rect=47%2C35%2C7940%2C4455&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p><a href="https://www.coindesk.com/tech/2022/02/02/blockchain-bridge-wormhole-suffers-possible-exploit-worth-over-250m/">News emerged</a> overnight of the potential theft of more than US$326 million (A$457.7 million) of Ethereum tokens from a blockchain bridge (which connects two blockchains so cryptocurrency can be exchanged between them). </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1489001949881978883"}"></div></p>
<p>It’s no surprise. Crypto crime has been on the rise – especially since the pandemic began. How are these crimes committed? And what can you do to stay ahead of scammers? </p>
<h2>Direct theft vs scams</h2>
<p>There are two main ways criminals obtain cryptocurrency: stealing it directly, or using a scheme to trick people into handing it over. </p>
<p>In 2021, crypto criminals directly stole a record US$3.2 billion (A$4.48 billion) worth of cryptocurrency, according to <a href="https://blog.chainalysis.com/reports/2022-crypto-crime-report-introduction/">Chainalysis</a>. That’s a <a href="https://go.chainalysis.com/2021-Crypto-Crime-Report.html">fivefold increase</a> from 2020. But schemes continue to overshadow outright theft, enabling scammers to lure US$7.8 billion (A$10.95 billion) worth of cryptocurrency from unsuspecting victims. </p>
<p>Crypto crime is a fast-growing enterprise. The rise of the crypto economy and decentralised finance (or DeFi), coupled with <a href="https://time.com/nextadvisor/investing/cryptocurrency/bitcoin-record-high-price/">record</a> cryptocurrency prices in 2021, has provided criminals with lucrative opportunities.</p>
<p>Australian data confirm the global trends. The <a href="https://www.accc.gov.au/publications/targeting-scams-report-on-scam-activity/targeting-scams-report-of-the-accc-on-scam-activity-2020">Australian Consumer and Competition Commission reported</a> more than A$26 million was lost to scams involving cryptocurrency in 2020 from 1,985 reports. In December, federal police <a href="https://www.abc.net.au/news/2021-12-08/cryptocurrency-scams-targeting-australians-losing-millions/100678848?utm_campaign=abc_news_web&utm_content=link&utm_medium=content_shared&utm_source=abc_news_web">told the ABC</a> crypto scam losses for 2021 exceeded A$100 million. That’s despite many incidents likely left unreported, often due to embarrassment by victims. </p>
<h2>Theft from exchanges</h2>
<p>Most consumers obtain cryptocurrency from an <a href="https://www.finder.com.au/cryptocurrency/exchanges">exchange</a>. This involves opening an account and depositing currency, such as Australian dollars, before converting it to a chosen cryptocurrency. </p>
<p>Typically the cryptocurrency is held in a “custodial wallet”. That means it’s assigned to the consumer’s account, but the private keys that control the cryptocurrency are held by the exchange. In other words, the exchange stores the cryptocurrency on the consumer’s behalf. </p>
<p>But just as a bank doesn’t hold all of its deposits in cash, an exchange will only hold enough cryptocurrency in “hot” wallets (connected to the internet) to facilitate customer transactions. For security, the remainder is held in “cold” wallets (not connected to the internet). </p>
<p>Unlike a bank, however, the government does not have a <a href="https://www.apra.gov.au/about-financial-claims-scheme">financial claims scheme</a> to guarantee cryptocurrency deposits if the exchange goes bust. </p>
<p>The recent BitMart hack is a cautionary tale. On December 4, <a href="https://support.bmx.fund//hc/en-us/sections/360000817854-Media-">the exchange announced</a> it had “identified a large-scale security breach” resulting in the theft of about US$150 million (A$210.6 million) in crypto assets from hot wallets. </p>
<p>BitMart temporarily suspended withdrawals and later promised it would use its “own funding to cover the incident and compensate affected users”. It’s unclear when this will happen, with the <a href="https://www.cnbc.com/2022/01/07/cryptocurrency-theft-bitmart-still-owes-victims-of-200-million-hack.html">CNBC reporting in January</a> that customers were still unable to access their cryptocurrency. BitMart wasn’t the first exchange to be hacked, and it won’t be the last. </p>
<p>Similarly, consumers may be left with losses if an exchange fails for commercial reasons, rather than theft. Australians were left stranded in December when liquidators were <a href="https://publishednotices.asic.gov.au/browsesearch-notices/notice-details/myCryptoWallet-Pty-Ltd-619265548/cf805712-a08f-46f2-8ace-45ab1300cb10">appointed over Melbourne-based exchange myCryptoWallet</a>. </p>
<p>One way consumers can protect themselves from exchange theft, or insolvency, is to transfer their cryptocurrency from the exchange to a software wallet (a secure application installed on a computer or smartphone) or a hardware wallet (a hardware device that can be disconnected from the computer and internet). </p>
<p>The cryptocurrency will then be under your direct control. But be warned, if you lose your private keys, <a href="https://www.cnbc.com/2021/01/15/uk-man-makes-last-ditch-effort-to-recover-lost-bitcoin-hard-drive.html">you lose your cryptocurrency</a>.</p>
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Read more:
<a href="https://theconversation.com/the-metaverse-is-money-and-crypto-is-king-why-youll-be-on-a-blockchain-when-youre-virtual-world-hopping-171659">The metaverse is money and crypto is king – why you'll be on a blockchain when you're virtual-world hopping</a>
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<h2>Types of scams</h2>
<p>Drawing on the ACCC’s latest edition of <a href="https://www.accc.gov.au/publications/the-little-black-book-of-scams">the Little Black Book of Scams</a>, the following types of scam are commonly observed in the cryptocurrency space, where the scammer is not personally known to the target: </p>
<ul>
<li><p>Email phishing</p>
<p>The scammer sends unsolicited emails asking for personal login details, which can be used to steal cryptocurrency. Alternatively, they may offer “prizes” or “rewards” in exchange for a deposit. </p></li>
<li><p>Investment scams</p>
<p>The scammer creates a website that resembles a legitimate investment trading platform. It may be a fraudulent copy of a real business, or a completely bogus one. They may even post fake advertisements on social media platforms, with fake celebrity endorsements. In the <a href="https://www.theguardian.com/australia-news/2022/feb/03/andrew-forrest-launches-criminal-action-against-facebook-over-scam-ads-that-used-his-image">latest news</a>, billionaire mining magnate Andrew “Twiggy” Forrest has launched criminal proceedings against Meta (previously Facebook) for allowing scam ads using his image.
<br><br>
More sophisticated operations will have multiple scammers emailing and calling victims to give the impression of being a legitimate organisation. After cryptocurrency deposits are made, victims may be able to “trade” on the fake platform but can’t withdraw their supposed earnings. Delay tactics include asking for further deposits to be made for fees or taxes. </p></li>
<li><p>Romance scams</p>
<p>The scammer creates a fake profile and matches with victims on a dating app or website. They may then ask for funds to help them with a personal crisis, such as needing a surgery. Or they may say they’re trading cryptocurrency and encourage the target to get involved, leading the victim into an investment scam, as described above. </p></li>
</ul>
<p>If a victim doesn’t already have a cryptocurrency exchange account, scammers may also coach them on how to open one. Some will mislead victims into installing remote access software on their computer, granting the scammer direct access to their internet banking or exchange account. </p>
<h2>Practical challenges</h2>
<p>There are practical legal challenges in the crypto crime environment. While <a href="https://www.scamwatch.gov.au/report-a-scam">reporting scams</a> can be helpful in providing data and intelligence for regulators and law enforcement, it’s unlikely to result in the recovery of funds.</p>
<p>Taking civil legal action may be possible, too, but identifying perpetrators is difficult. Since cryptocurrency is by its very nature global and decentralised, payments are often made to parties outside of Australia. </p>
<p>So prevention is easier than a cure. The main way to avoid being scammed is to ensure you know exactly who you’re dealing with, transact through a reputable exchange and ensure all the channels you go through are verified. If an offer sounds too good to be true, it almost certainly is. </p>
<h2>Regulation on the horizon</h2>
<p>In Australia, cryptocurrency exchanges must be registered with <a href="https://www.austrac.gov.au/">AUSTRAC</a>, in compliance with anti-money laundering and counter-terror financing obligations. But there are currently no other licensing requirements (such as capital requirements or cybersecurity, for example). </p>
<p>Last year, the Senate Select Committee into Australia as a Technology and Financial Centre <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Financial_Technology_and_Regulatory_Technology/AusTechFinCentre/Final_report">recommended</a> a more comprehensive licensing framework. The Australian government <a href="https://treasury.gov.au/publication/p2021-231824">agreed with the recommendation</a>, and the federal treasury department is due to begin consulting on what this will look like. </p>
<p>Mandatory measures to curb cryptocurrency crime at the exchange level will likely be high on the agenda.</p><img src="https://counter.theconversation.com/content/176027/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aaron M. Lane works for the RMIT University Blockchain Innovation Hub and holds honorary research positions at the UCL Centre for Blockchain Technologies and the University of Divinity. Aaron is a member of the Digital Commerce Committee of the Law Council of Australia. Aaron is also Special Counsel at law firm Duxton Hill where he advises on matters involving cryptocurrency. </span></em></p>Although it’s estimated illicit activity amounts to less than 1% of all cryptocurrency transactions, figures of losses are still staggering – and on the rise.Aaron M. Lane, Senior Lecturer in Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1412892020-07-06T02:28:52Z2020-07-06T02:28:52Z$2.5 billion lost over a decade: ‘Nigerian princes’ lose their sheen, but scams are on the rise<figure><img src="https://images.theconversation.com/files/345461/original/file-20200703-33926-nxbl9g.jpg?ixlib=rb-1.1.0&rect=173%2C41%2C5329%2C3621&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Last year, Australians reported more than A$634 million lost to fraud, a significant jump from $489.7 million the year before.</p>
<p>The Australian Competition and Consumer Commission (ACCC) has released its latest annual <a href="https://www.accc.gov.au/publications/targeting-scams-report-on-scam-activity/targeting-scams-2019-a-review-of-scam-activity-since-2009">Targeting Scams</a> report.</p>
<p>But despite increased awareness, scam alerts and targeted education campaigns, more Australians are being targeted than ever before. </p>
<p>With all the technological tools we have, why does fraud continue to be so pervasive? And how can the damage be reduced?</p>
<h2>Latest key findings</h2>
<p>According to the ACCC’s report, “<a href="https://eprints.qut.edu.au/200621/">business email compromise</a>” fraud rose to dominance in 2019. </p>
<p>At $132 million, it became the highest category of financial loss reported – the first time this has happened. This usually involves using <a href="https://www.scamwatch.gov.au/types-of-scams/attempts-to-gain-your-personal-information/phishing">phishing</a> and hacking to infiltrate company systems and email accounts. </p>
<p>Offenders can intercept payment invoices, or create their own, and funnel victims’ funds into their own accounts. Businesses and individuals make their payments as usual, but unknowingly pay the offender. </p>
<p>Investment and romance schemes also continue to defraud victims. Reports of investment fraud totalled $126 million, up from $80 million in 2018. And romance fraud losses totalled $83 million, up from $60.5 million in 2018.</p>
<p>Overall, men reported higher financial losses ($77.5 million) than women ($63.6 million).</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1273135104827756545"}"></div></p>
<h2>Years of statistics</h2>
<p>Reflecting on <a href="https://www.accc.gov.au/publications/targeting-scams-report-on-scam-activity/targeting-scams-report-on-scam-activity-2009">a decade</a> of the ACCC’s Targeting Scams reports, we can see how fraud has changed with the times. </p>
<p>Since the first report in 2009 (which recorded $69.9 million in losses) Australians have collectively reported more than <a href="https://www.scamwatch.gov.au/news-alerts/scams-cost-australians-over-630-million">$2.5 billion</a> in losses.</p>
<p>The number of reports has increased significantly. While this likely reflects a higher percentage of the population being targeted, it also represents more authorities receiving complaints and contributing statistics. </p>
<p>For instance, 2019 marked the first year the big four Australian banks (Westpac, NAB, Commonwealth Bank and ANZ) contributed their data. </p>
<h2>The ‘prince of Nigeria’ needs your help</h2>
<p>Today’s offenders have very different approaches to those of ten years ago. There were once many more stories of <a href="https://www.bbb.org/new-york-city/get-consumer-help/articles/the-nigerian-prince-old-scam-new-twist/">Nigerian princes</a> (although these <a href="https://theconversation.com/why-nigerian-prince-scams-continue-to-dupe-us-98232">still exist</a>). </p>
<p>These days, victims are most often contacted by telephone, although email, text message and social media communications are also common. </p>
<p>Payment methods have advanced, too, with <a href="https://www.consumer.ftc.gov/blog/2019/11/scams-telling-you-pay-bitcoin-rise">bitcoin</a> and cryptocurrencies becoming popular ways for offenders to receive money.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/345462/original/file-20200703-33947-9zlsc4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/345462/original/file-20200703-33947-9zlsc4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/345462/original/file-20200703-33947-9zlsc4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=387&fit=crop&dpr=1 600w, https://images.theconversation.com/files/345462/original/file-20200703-33947-9zlsc4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=387&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/345462/original/file-20200703-33947-9zlsc4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=387&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/345462/original/file-20200703-33947-9zlsc4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=486&fit=crop&dpr=1 754w, https://images.theconversation.com/files/345462/original/file-20200703-33947-9zlsc4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=486&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/345462/original/file-20200703-33947-9zlsc4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=486&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">According to the ACCC’s 2019 report, men were more likely to report losses to investment fraud, while women were the major target for romance fraud.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Why is fraud still so successful?</h2>
<p>While technology has long helped scammers, it has also helped improve cyber security options such as antivirus software, and email filters to block spam. So why do we still have fraud?</p>
<p>Essentially, fraud takes a human approach. Criminals seek to capitalise on victims’ weaknesses in a calculated manner. For example, this year Australians looking to buy pets during lockdown lost almost $300,000 to <a href="https://www.scamwatch.gov.au/news-alerts/dont-get-scammed-looking-for-a-lockdown-puppy">puppy scams</a>.</p>
<p>Offenders have also shifted their focus to counteract fraud prevention messages to the public from police and other agencies. One prime example is the <a href="https://www.accc.gov.au/system/files/1557_Little%20Black%20Book%20of%20Scams%202019_FA%20WEB.pdf">Little Black Book of Scams</a> released by the ACCC <a href="https://www.scamwatch.gov.au/news-alerts/the-new-little-black-book-of-scams-is-here">in 2008</a>. </p>
<p>It provides comprehensive details of many common fraud schemes and has influenced fraud-prevention messaging across both the <a href="https://www.met.police.uk/SysSiteAssets/media/downloads/central/advice/fraud/met/the-little-book-of-big-scams.pdf">United Kingdom</a> and <a href="https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04333.html">Canada</a>.</p>
<p>To counter prevention messaging, offenders now recruit Australians to launder their funds. Known as “<a href="https://www.acic.gov.au/media-centre/joint-media-releases/world-wide-week-action-targeting-money-mules">money mules</a>”, they are often victims themselves, asked to receive and transfer money on behalf of offenders. </p>
<p>From a victim’s perspective, there are fewer red flags when asked to send money to a Big Four bank account in Melbourne, compared to sending money to Lagos.</p>
<p>Similarly, since there has been a strong push against sending money to people you don’t know, offenders have embraced the use of romance fraud (which targeted more women than men in 2019). </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/from-catfish-to-romance-fraud-how-to-avoid-getting-caught-in-any-online-scam-115227">From catfish to romance fraud, how to avoid getting caught in any online scam</a>
</strong>
</em>
</p>
<hr>
<p>Offenders develop relationships and build trust to eventually cheat victims. And as last year’s report notes, they are now initiating relationships through channels other than dating apps, such as Instagram and even the online game <a href="https://www.scamwatch.gov.au/news-alerts/romance-scammers-move-to-new-apps-costing-aussies-more-than-286-million">Words with Friends</a>. </p>
<p>With a focus on building relationships with victims, fraud requests are no longer as outrageous as they once were (although this <a href="https://www.huffingtonpost.com.au/entry/nigerian-astronaut-space-trapped_n_56c2ced4e4b0c3c550527f0b?ri18n=true">Nigerian astronaut</a> scam was an exception). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/345694/original/file-20200706-33913-35lkyg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/345694/original/file-20200706-33913-35lkyg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/345694/original/file-20200706-33913-35lkyg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/345694/original/file-20200706-33913-35lkyg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/345694/original/file-20200706-33913-35lkyg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/345694/original/file-20200706-33913-35lkyg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=522&fit=crop&dpr=1 754w, https://images.theconversation.com/files/345694/original/file-20200706-33913-35lkyg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=522&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/345694/original/file-20200706-33913-35lkyg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=522&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">As cybersecurity features such as email spam filters advance, attackers are finding new, innovative ways to deceive victims.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Manipulation and monopolising on emotions</h2>
<p>As we gain a better understanding of how offenders operate, we’re starting to learn how effectively victims can be persuaded. </p>
<p>Fraud relies on the use of <a href="https://eprints.qut.edu.au/66444/">social engineering</a> techniques such as authority and urgency to gain compliance. Offenders often take on the identity of someone with power and status to persuade victims to send money. They also stress the urgency of the request, to stop victims from thinking too much. </p>
<p><a href="https://eprints.qut.edu.au/118434/">Psychological abuse</a> techniques are also used to isolate and monopolise on victims. In this way, offenders try to remove victims from their support networks and place an air of secrecy around their interactions. And this limits a victims ability to seek support when needed. </p>
<p>There has been a greater recognition of the problem across government and industry. Despite this, there’s still often a sense of <a href="https://eprints.qut.edu.au/83702/">shame and embarrassment</a> at being deceived, and victims have difficulty <a href="https://aic.gov.au/publications/tandi/tandi518">reporting</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/inside-the-mind-of-the-online-scammer-127471">Inside the mind of the online scammer</a>
</strong>
</em>
</p>
<hr>
<h2>Defences for the future</h2>
<p>The latest Targeting Scams report shows us offenders are still looking to gain a financial advantage, and will do whatever it takes. While you can’t guarantee safety, there are some simple steps that can help reduce the likelihood of fraud:</p>
<ul>
<li><p>recognise your own vulnerability to fraud. Everyone is a potential target.</p></li>
<li><p>talk about fraud-related experiences with family and friends in a non-judgemental way. Offenders want victims to stay silent.</p></li>
<li><p>in an uncertain situation, don’t feel pressured to xfrespond, as offenders rely on people making quick decisions. Hang up the phone, delete the email, or simply step back.</p></li>
</ul>
<p>Now, more than ever, we must recognise the prevalence of fraud and the ways it impacts individuals and organisations across society. If we can learn from the past decade, maybe we can improve our defences for the next decade. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/TRDgOGf5VAM?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure><img src="https://counter.theconversation.com/content/141289/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cassandra Cross is affiliated with the Cybersecurity Cooperative Research Centre. She has also received funding from the Australian Institute of Criminology</span></em></p>Last year, men were more likely to report losses to investment fraud, while women were the main target for romance fraud. Overall, men reported higher financial loss.Cassandra Cross, Senior Research Fellow, Faculty of Law, Cybersecurity Cooperative Research Centre, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1392172020-05-29T03:40:08Z2020-05-29T03:40:08ZThere is no specific crime of catfishing. But is it illegal?<figure><img src="https://images.theconversation.com/files/338125/original/file-20200528-143715-18ybz85.jpg?ixlib=rb-1.1.0&rect=0%2C205%2C3928%2C2305&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Twenty-year-old Sydney woman Renae Marsden died by suicide after she was the victim of an elaborate catfishing scam.</p>
<p>A recent <a href="http://www.coroners.justice.nsw.gov.au/Documents/Marsden%20findings%2020%20May%2020.pdf">coronial investigation</a> into her 2013 death found no offence had been committed by the perpetrator, revealing the difficulties of dealing with this new and emerging phenomenon.</p>
<p>While we wait for law reform in this area, we think police and prosecutors could make better use of our existing laws to deal with these sorts of behaviours.</p>
<h2>What is catfishing?</h2>
<p>“Catfishing” occurs when a person creates a fake profile on social media in order to deceive someone else and abuse them, take their money or otherwise
manipulate and control them. </p>
<p>While statistics about the prevalence of catfishing are elusive, popular dating sites <a href="https://www.eharmony.co.uk/dating-advice/dating/how-to-spot-a-catfish">such as eHarmony</a> and the Australian government’s <a href="https://www.esafety.gov.au/young-people/catfishing">eSafety Commission</a> offer advice about spotting catfishers. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/from-catfish-to-romance-fraud-how-to-avoid-getting-caught-in-any-online-scam-115227">From catfish to romance fraud, how to avoid getting caught in any online scam</a>
</strong>
</em>
</p>
<hr>
<p>Catfishing is also the subject of an <a href="http://www.mtv.com.au/catfish-the-tv-show">MTV reality series</a>, major Hollywood <a href="https://www.imdb.com/title/tt7668870/">films</a>, and <a href="https://theconversation.com/its-not-about-money-we-asked-catfish-why-they-trick-people-online-100381">psychological research</a> on why people do it.</p>
<h2>Dangerous, damaging but not a specific crime</h2>
<p>There is no specific crime of catfishing in Australia. But there are many different behaviours involved in catfishing, which can come under various existing offences. </p>
<p>One of these is financial fraud. In 2018, a Canberra woman pleaded guilty to <a href="http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2018/285.html">10 fraud offences</a> after she created an elaborate and false online profile on a dating website. She befriended at least ten men online, then lied to them about having cancer and other illnesses and asked them to help her pay for treatment. She obtained more than $300,000. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/338126/original/file-20200528-143682-18oykbs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/338126/original/file-20200528-143682-18oykbs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=376&fit=crop&dpr=1 600w, https://images.theconversation.com/files/338126/original/file-20200528-143682-18oykbs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=376&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/338126/original/file-20200528-143682-18oykbs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=376&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/338126/original/file-20200528-143682-18oykbs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/338126/original/file-20200528-143682-18oykbs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/338126/original/file-20200528-143682-18oykbs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Catfishers create fake online profiles to deceive others.</span>
<span class="attribution"><span class="source">www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>Another crime associated with catfishing is stalking. In 2019, a Victorian woman was <a href="https://www.abc.net.au/news/2019-06-06/lincoln-lewis-catfish-lydia-abdelmalek-sentenced/11184174">convicted of stalking</a> and sentenced to two years and eight months jail after she created a Facebook page where she pretended to be Australian actor Lincoln Lewis. This case is currently <a href="https://www.abc.net.au/news/2020-02-28/lincoln-lewis-catfish-lydia-abdelmalek-directions-hearing/12009492">subject to an appeal</a>.</p>
<h2>The grey area of psychological and emotional abuse</h2>
<p>When catfishing doesn’t involve fraud or threats, but involves psychological and emotional manipulation, it can be more difficult to obtain convictions. </p>
<p>One of the most notorious cases occurred more than a decade ago in the United States. Missouri mother <a href="https://casetext.com/case/us-v-drew-12">Lori Drew</a> catfished a teenager she believed had been unkind to her daughter. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/have-you-caught-a-catfish-online-dating-can-be-deceptive-109702">Have you caught a catfish? Online dating can be deceptive</a>
</strong>
</em>
</p>
<hr>
<p>With the help of her <a href="https://www.theguardian.com/world/2008/nov/26/myspace-suicide-cyber-bully">daughter and young employee</a>, Drew created a fake MySpace profile as a teenage boy and contacted the 13-year-old victim. Online flirting took place until the relationship was abruptly ended. The victim was told that “the world would be a better place without her”. Later that day, she killed herself. </p>
<p>Because the harm suffered by the victim was not physical but psychological, and had been perpetrated online, prosecutors had trouble identifying an appropriate criminal charge. </p>
<p>Eventually, Drew was charged with computer fraud and <a href="https://www.nytimes.com/2008/11/27/us/27myspace.html">found guilty</a>. But the <a href="https://www.wired.com/2009/07/drew-court/">conviction was overturned</a> in 2009 when an appeal court concluded the legislation was never meant to capture this type of behaviour.</p>
<h2>Renae Marsden’s case</h2>
<p>The harm done to Marsden was also psychological and emotional. She was deliberately deceived and psychologically manipulated through the creation of a fake online identity by one of her oldest female friends.</p>
<p>Marsden thought she had met a man online who would become her husband. For almost two years, they exchanged thousands of text and Facebook messages. Marsden ended an engagement to another man so that she could be with the man she met online. They planned their wedding. </p>
<p>When he abruptly ended the relationship, Marsden ended her life.</p>
<p>The coroner described the conduct of Marsden’s catfisher as “appalling” and an “extreme betrayal”, but found that no offence had been committed. She <a href="http://www.coroners.justice.nsw.gov.au/Documents/Marsden%20findings%2020%20May%2020.pdf">observed</a>:</p>
<blockquote>
<p>Where ‘catfishing’ is without threat or intimidation or is not for monetary gain, then the conduct appears to be committed with the intent to coerce and control someone for the purpose of a wish fulfilment or some other gratification. Though such conduct may cause the recipient mental and or physical harm because it is not conduct committed with the necessary intent it falls outside the parameters of a known State criminal offence.</p>
</blockquote>
<h2>Existing laws like manslaughter could apply</h2>
<p>We disagree with the coroner’s conclusion. We think that existing state criminal offences might capture some of this behaviour.</p>
<p>In particular, deliberately deceptive and psychologically manipulative online conduct, resulting in the death of a victim by suicide, could potentially make a perpetrator liable for manslaughter. </p>
<p>This is because a perpetrator who commits the offence of <a href="https://www.legislation.nsw.gov.au/#/view/act/1900/40/part3/div6/sec35">recklessly causing grievous bodily harm</a> (which may include <a href="http://eresources.hcourt.gov.au/showCase/2017/HCA/18">psychological harm</a>), in circumstances where a reasonable person would realise this exposed the victim to an appreciable <a href="http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1992/31.ht">risk of serious injury</a>, could be liable for the crime of “<a href="https://www.judcom.nsw.gov.au/publications/benchbks/criminal/manslaughter.html#p5-980">manslaughter</a> by unlawful and dangerous act”.</p>
<p>Such prosecutions can and should be contemplated as an appropriate response to the serious wrongdoing that has occurred.</p>
<h2>Where to from here?</h2>
<p>Marsden’s <a href="https://www.smh.com.au/national/nsw/parents-of-catfishing-victim-want-laws-changed-and-named-after-renae-20200520-p54uo2.html">parents are pushing</a> for catfishing to be made illegal. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/338127/original/file-20200528-143732-o94gwf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/338127/original/file-20200528-143732-o94gwf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/338127/original/file-20200528-143732-o94gwf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/338127/original/file-20200528-143732-o94gwf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/338127/original/file-20200528-143732-o94gwf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/338127/original/file-20200528-143732-o94gwf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/338127/original/file-20200528-143732-o94gwf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Teresa and Mark Marsden want catfishing to be made illegal.</span>
<span class="attribution"><span class="source">Dean Lewis/AAP</span></span>
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<p>The coroner chose not to recommend a specific offence of catfishing, noting: </p>
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<p>there are complex matters which were not canvassed at the inquest which need to be taken into account before any coronial recommendation involving the introduction of criminal legislation.</p>
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<p>But the report did recommend a closer look at making “<a href="https://theconversation.com/its-time-coercive-control-was-made-illegal-in-australia-114817">coercive control</a>” an offence. </p>
<p>Coercive control involves a wide range of controlling behaviours and could potentially criminalise the sort of psychologically and emotionally abusive conduct Marsden experienced. </p>
<p>It is also on the political agenda. In March, New South Wales Attorney-General Mark Speakman announced he would consult on <a href="https://www.theaustralian.com.au/nation/state-seeks-law-to-ban-coercive-domestic-abuse/news-story/8e7f2519ebad5833d1a54393fa7a458b">possible new “coercive control” laws</a>.</p>
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Read more:
<a href="https://theconversation.com/its-time-coercive-control-was-made-illegal-in-australia-114817">It's time 'coercive control' was made illegal in Australia</a>
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<p>We note, however, that the coercive control discussion is happening in the context of domestic violence. Whether prospective new laws can or should extend to catfishing will require careful consideration and drafting.</p>
<p>While we wait for a new offence, we should also ensure that we make use of the laws we already have to protect people from the devastating damage that can be done by catfishing.</p><img src="https://counter.theconversation.com/content/139217/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There is no specific crime of catfishing in Australia. So we have to make better use of existing laws to address this devastating behaviour.Marilyn McMahon, Deputy Dean, School of Law, Deakin UniversityDr Paul McGorrery, PhD Candidate in Criminal Law, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1278202019-11-28T04:13:10Z2019-11-28T04:13:10ZA handsome soldier with a ‘medical bill’: how romance scammers make you fall in love with them<p>Maria Exposto, a Sydney grandmother who fell victim to a romance scam and <a href="https://www.abc.net.au/news/2019-11-26/sydney-grandmother-facing-death-learns-fate-in-malaysian-court/11738850">became an unwitting drug mule</a>, couldn’t have known what was before her when she left Australia to sign documents for her fiancé so he could retire and marry her.</p>
<p>At 50-years-old, Exposto had fallen for a widowed special forces soldier doing his bit for his country. </p>
<p>They have never met, which was easily explained – he was deployed in Afghanistan. She described being “blindly in love” with a man who wooed her online, serenading her with love songs and long, deep conversations.</p>
<p>Exposto <a href="https://www.abc.net.au/news/2019-11-26/sydney-grandmother-facing-death-learns-fate-in-malaysian-court/11738850">recently walked free</a> after facing a death sentence in Malaysia for attempting to smuggle a kilogram of ice five years ago. Since she was caught, she has maintained she was a victim of a romance scam. </p>
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Read more:
<a href="https://theconversation.com/from-catfish-to-romance-fraud-how-to-avoid-getting-caught-in-any-online-scam-115227">From catfish to romance fraud, how to avoid getting caught in any online scam</a>
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<p>Sadly, Exposto’s story is not unique. Like Exposto, <a href="https://www.ncbi.nlm.nih.gov/pubmed/28657792">victims of romance scams</a> tend to be between 45 to 54-years-old, impulsive, respond to elaborate stories and are well-educated. </p>
<p>Romance scammers prey on people to build a relationship and defraud their victims. They are clever, well organised and have a number of tried techniques that make them highly successful. </p>
<p>The extreme emotional ties formed can make victims easy to manipulate and leave them vulnerable to knowingly or unknowingly engaging in criminal activity.</p>
<p>More than <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/4528.0Main%20Features162014-15?opendocument&tabname=Summary&prodno=4528.0&issue=2014-15&num=&view=Personal">10 million Australians</a> are exposed to at least one personal fraud scam each year. </p>
<p>And with more than 3.5 million Australians <a href="https://www.relationships.org.au/what-we-do/research/online-survey/november-2017-online-dating">using Tinder alone</a>, the opportunities for romance scammers is growing rapidly. In fact, online dating fraud <a href="https://mashable.com/2012/02/09/online-dating-fraud">rose by 150%</a> in a year from 2011, with criminals recognising the opportunities to exploit those looking for a partner.</p>
<h2>Scammers are in for the long haul</h2>
<p>In Exposto’s case, the “relationship” had been ongoing for more than a year. This is not surprising, as romance scammers are <a href="https://scinapse.io/papers/2581815792">in for the long haul</a> and see the process as a long term investment to establish intimacy and trust. They often use teams of people to “hook” and “woo” the victim.</p>
<p>Scammers typically fake profiles with stolen photographs, often mimicking army officers, and <a href="https://scinapse.io/papers/2581815792">frequently create a story</a> of tragic or desperate circumstances. Armed force identities are common, as it easily explains their inability to meet in person.</p>
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<a href="https://images.theconversation.com/files/304193/original/file-20191128-176588-1v95b6r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/304193/original/file-20191128-176588-1v95b6r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/304193/original/file-20191128-176588-1v95b6r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304193/original/file-20191128-176588-1v95b6r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304193/original/file-20191128-176588-1v95b6r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304193/original/file-20191128-176588-1v95b6r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304193/original/file-20191128-176588-1v95b6r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304193/original/file-20191128-176588-1v95b6r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Could the handsome military officer’s picture actually come from a stock image website? It’s a good idea to reverse image search the photo of your online partner.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<p>It’s <a href="https://academic.oup.com/bjc/article/53/4/665/396759">this willingness of the scammer</a> to engage in a prolonged, sustained interaction that creates the belief the relationship is “real” and leading to something more permanent.</p>
<p>Eventually, the scammer has ensnared a person who has heavily invested in the relationship, has a strong emotional attachment and has been groomed to believe they “know and understand” their partner.</p>
<p>After the bond is established, <a href="https://www.scamnet.wa.gov.au/scamnet/Scam_types-Dating__romance-Fake_social_media_profiles.htm">scammers frequently request money</a> to pay fictitious medical bills, help partners out of dangerous situations or pay for tickets.</p>
<h2>Money mules</h2>
<p>In some cases, victims can become involved in illegal activities including money laundering and bank fraud, and <a href="https://www.consumer.ftc.gov/blog/2015/07/faking-it-scammers-tricks-steal-your-heart-and-money?page=1">are at risk</a> of being charged. These types of victims are often referred to as “money mules”. </p>
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Read more:
<a href="https://theconversation.com/how-to-get-away-with-fraud-the-successful-techniques-of-scamming-99523">How to get away with fraud: the successful techniques of scamming</a>
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<p>And “mule recruitment” is when the scammer attempts to get a person to receive stolen funds and then transfer those funds to criminals overseas. </p>
<p>Many victims of fraud related crimes can also suffer their own financial loss, on top of facing the sudden loss of, what was to them, an important and significant intimate relationship – a “double hit”. </p>
<p>Victims <a href="https://journals.sagepub.com/doi/full/10.1177/1748895815603773">have described</a> the loss of the relationship as more devastating than their financial loss.</p>
<h2>Shame and humiliation</h2>
<p>Their experience is more psychologically damaging than other types of fraud, and is often compounded by a total lack of understanding from family and friends. </p>
<p>Some victims <a href="https://journals.sagepub.com/doi/full/10.1177/1748895815603773">remain in denial</a> and are unable to accept the scam or separate the fake identity with a criminal. Some realise they’ve exposed themselves or performed sexual acts online, and feel humiliated and violated. They report feeling depressed, and even suicidal. </p>
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Read more:
<a href="https://theconversation.com/more-than-just-money-getting-caught-in-a-romance-scam-could-cost-you-your-life-97258">More than just money: getting caught in a romance scam could cost you your life</a>
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<p>And victims have said they lost trust in others, severed social ties, and suffered a lower sense of self-worth and confidence. </p>
<p>This social withdrawal and isolation can make victims vulnerable to a second wave of the scam, believing their online partners excuses or explanations that they really are “real”.</p>
<p>But victims don’t often receive social support, reporting that family, friends and colleagues thought they were stupid, or were angry with them because of the financial loss, such as losing inheritance. </p>
<p>Many victims keep their experience a secret or don’t disclose the entire story for fear of these types of reactions. </p>
<h2>How can you avoid being duped?</h2>
<p>There are ways you can avoid being scammed by a one-sided romance. </p>
<p>Read and take heed of the instructions on dating websites. Most have clear guidelines of how to avoid online fraud, such as being suspicious about early declarations of love, requesting or receiving money. </p>
<p>It’s also a good idea to use their photos to do some <a href="https://support.google.com/websearch/answer/1325808?co=GENIE.Platform%3DDesktop&hl=en">sleuthing online</a>, and see what information pops up when you do a reverse image search on Google. Look for any inconsistencies, see if what they’ve told you about themselves adds up. </p>
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Read more:
<a href="https://theconversation.com/why-we-need-to-do-more-for-the-victims-of-online-fraud-and-scams-59670">Why we need to do more for the victims of online fraud and scams</a>
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<p>You can also run their email address through <a href="https://www.romancescams.org/">RomanceScams.org</a> which lists names of known scammers.</p>
<p>And if you become aware a friend or family member has been victimised, remember it’s a time to provide support and understanding to break the isolation, allowing the victim to grieve over the lost relationship, rebuild their self-esteem, and try again.</p><img src="https://counter.theconversation.com/content/127820/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Romance scammers are clever, well organised and have a number of tried techniques which make them highly successful. But there are ways you can avoid being scammed by a one-sided romance.Natalie Gately, Criminology Courses Coordinator, Edith Cowan UniversityJames McCue, Lecturer in Psychology and Criminology, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1152272019-04-30T20:13:35Z2019-04-30T20:13:35ZFrom catfish to romance fraud, how to avoid getting caught in any online scam<figure><img src="https://images.theconversation.com/files/271706/original/file-20190430-136784-11vbpdq.jpg?ixlib=rb-1.1.0&rect=183%2C259%2C1405%2C893&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Casey Donovan (right) talks about her catfish experience during her interview with Andrew Denton (left) on Channel 7.</span> <span class="attribution"><span class="source">Andrew Denton: Interview</span></span></figcaption></figure><p>Australian singer-songwriter Casey Donovan opened up again last night about the six years she thought she was involved in a relationship with a man she never met, someone called “Campbell”.</p>
<p>The Australian Idol winner told the <a href="https://7plus.com.au/andrew-denton-interview">Andrew Denton: Interview show</a>, on Channel 7, how she was a victim of catfishing – a cruel hoax in which someone creates a false identity to play on the romantic emotions of a person by pretending to be someone they’re not, either online or, in Donovan’s case, over the phone.</p>
<p>“Hope kept me there,” <a href="https://www.facebook.com/watch/?v=2337566352970407">she told the program</a>. “To think that no-one could actually do that to another human being and to think of all the shit I’d already encountered in my life, to be at that point and to […] just have everything fall apart, it really hurt.”</p>
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Read more:
<a href="https://theconversation.com/the-abuse-tactics-fraudsters-use-to-break-the-hearts-and-wallets-of-those-looking-online-for-love-93663">The abuse tactics fraudsters use to break the hearts and wallets of those looking online for love</a>
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<p>Donovan has <a href="https://www.news.com.au/entertainment/music/casey-donovans-bizarre-confession-my-sixyear-relationship-was-a-hoax/news-story/9b45d2496a06fbcea6e376cd42a6f2f2">spoken about her case before</a> and there are many others who have been catfished – just do a quick search of YouTube.</p>
<p>There are some similarities between catfishing and online romance fraud, something I’ve been involved in studying for more than ten years.</p>
<p>So is there anything we can do to avoid being deceived by both? </p>
<h2>They play with your heart</h2>
<p>My <a href="https://eprints.qut.edu.au/view/person/Cross,_Cassandra.html">research on romance fraud</a> has focused on the use of online deception to destroy both the hearts and wallets of victims worldwide.</p>
<p>Latest figures on romance fraud in Australia show victims <a href="https://www.accc.gov.au/publications/targeting-scams-report-on-scam-activity/targeting-scams-report-of-the-accc-on-scam-activity-2018">lost more than A$24 million in 2018 cases reported to ScamWatch</a>, run by the Australian Competition and Consumer Commission. About A$19.5 million were losses reported by women.</p>
<p>While catfishing arguably uses the same types of deception and manipulation as romance fraud, the ultimate end goal is different. Those who catfish others online usually don’t have a financial motive.</p>
<p>Unfortunately, there are no known statistics on the prevalence of catfishing, so the extent of this type of victimisation is largely unknown. </p>
<p>While the statistics on romance fraud are problematic – the 2018 ScamWatch figure is up $4.1 million on the year before – it is still officially recognised as a form of fraud and a legitimate form of victimisation. </p>
<p>Catfishing itself is not a crime. It is only the deception associated with it that can be classed as fraud, and is therefore criminal.</p>
<h2>A catfish captured</h2>
<p>Earlier last month, Lydia Abdelmalek was <a href="https://www.abc.net.au/news/2019-04-09/lincoln-lewis-fake-catfish-internet-stalker-court-trial/10919538">found guilty</a> in a Melbourne Court of stalking six people.</p>
<p>Adbelmalek was also a catfish. </p>
<p>In her case she took on the persona of Australian actor Lincoln Lewis to deceive several women online. The depth of her deception and the extent of her harassment and ongoing threatening behaviour to her victims tragically resulted in <a href="https://www.abc.net.au/news/2019-04-09/lincoln-lewis-warns-of-social-media-catfish-dangers/10985118">one of her victims taking her own life</a>.</p>
<p>Abdelmalek is to be sentenced in June.</p>
<h2>Victim violation</h2>
<p>The sense of violation and betrayal is common across both romance fraud and catfishing. </p>
<p>In romance fraud, it is termed the “<a href="https://fido.nrk.no/d6f57fd73b9898b42c8c322c961c8255f370677fbac5272b71d86047a5359b66/Whitty_romance_scam_report.pdf," title="The Psychology of the Online Dating Romance Scam">double hit</a>” of victimisation, whereby the emotional loss is actually more severe and traumatising than the financial loss itself.</p>
<p>This same sense of emotional harm is evident in the case of those who are catfished. </p>
<p>The same issues around acknowledgement of victimisation and reporting are consistent. Many victims likely do not ever realise they are involved in a relationship with someone who doesn’t exist or who has been lying to them. </p>
<p>If they are aware, it is also likely that many do not report or disclose to family or friends. The level of embarrassment, shame and <a href="https://eprints.qut.edu.au/83702/" title="No laughing matter: Blaming the victim of online fraud">stigmatisation</a> experienced by victims is likely to be similar. </p>
<h2>How it works</h2>
<p>The techniques used by catfish are similar in many ways to what we know about <a href="https://eprints.qut.edu.au/118434/" title="Understanding romance fraud: Insights from domestic violence research">romance fraud</a>.</p>
<p>The same social engineering techniques, the same grooming process that seeks to develop trust and rapport with the victim. The same level of patience used by offenders to maintain the ruse for weeks, months, and even years in the case of Donovan. </p>
<p>Nobody sets out to be a victim of online deception, whether it is catfishing or romance fraud. These perpetrators identify a weakness or vulnerability in a potential victim, and exploit this by whatever means necessary.</p>
<h2>Why do people catfish?</h2>
<p>There is limited research as to why individuals engage in online deception, across both catfishing and romance fraud. For romance fraud, there is a strong argument that offenders are motivated to defraud victims for financial reasons.</p>
<p>There is also emerging links of romance fraud to <a href="https://torontosun.com/2017/02/02/scam-artist-who-posed-as-fictitious-soldier-faces-extradition/wcm/b6d8fd0e-3f29-4997-8c59-202799eb91e1">global organised crime</a> networks. </p>
<p>But this does not hold for catfishing. Rather, the small amount of <a href="https://www.qt.com.au/news/its-hard-to-stop-the-addiction-the-reasons-why-peo/3477706/">research</a> that explores the reasons fuelling catfish activities, link to a perpetrator’s feelings of loneliness, low self-esteem, escapism, and a desire to explore their sexuality through a different persona.</p>
<p>These are all focused on the offender themselves, rather than being concentrated on any victim characteristic. </p>
<p>Given the extent of the harm incurred by online deception, it is imperative to gain a better understanding of the factors which motivate those behind both romance fraud and catfishing. </p>
<h2>How not to get caught in a scam</h2>
<p>Online deception is difficult to guard against. How can you convince someone that the person they are in love with is not real?</p>
<p>In the case of romance fraud, all prevention messages revolve around the inevitable <a href="https://www.scamwatch.gov.au/types-of-scams/dating-romance">request to send money</a>. But in the case of catfishing, this message is redundant. </p>
<p>But there are similar signs to look out for. A refusal to meet in person or sometimes to communicate via other social media platforms. Inconsistencies in the stories used by those who perpetrate these acts. A gut feeling that something is not quite right. </p>
<p>On the <a href="https://www.imdb.com/title/tt2498968/">US television documentary series Catfish</a>, hosts Nev and Max use a range of techniques to try to find the real identities of those who are behind the online catfish.</p>
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<figcaption><span class="caption">Caught out!</span></figcaption>
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<p>Sometimes, a simple reverse image search on pictures used by the catfish may provide answers. </p>
<p>Ultimately, looking for love or friendship online comes with risk, in the same way that driving to work each day carries with it an understood level of risk.</p>
<p>But we should not disengage from social media or communicating online. Instead, we need to take precautions to reduce the likelihood that we become victims to online deception, in the form of either catfishing or romance fraud.</p><img src="https://counter.theconversation.com/content/115227/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cassandra Cross has received funding from the Criminology Research Grants program, Australian Institute of Criminology. </span></em></p>Whether you’re caught by a catfish or an online romance scammer, both use similar techniques to play with your emotions.Cassandra Cross, Senior Lecturer in Criminology, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/995232018-08-16T20:19:29Z2018-08-16T20:19:29ZHow to get away with fraud: the successful techniques of scamming<figure><img src="https://images.theconversation.com/files/230528/original/file-20180803-41357-pb9hkr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fraudsters use specific social engineering tactics to gain the trust of their victims.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>It is easy for those of us who have ignored emails from Nigerian princes or refused to transfer money on behalf of an online love interest to scroll past stories about scams, thinking it could never be us. </p>
<p>But so far this year, Australians have reported losing <a href="https://www.scamwatch.gov.au/about-scamwatch/scam-statistics">more than AU$76 million</a> to all types of fraud, with phishing scams being the most prevalent. Given fraud has one of the lowest reporting rates, this is likely to be the tip of the iceberg. </p>
<p>From the outside, it’s difficult to understand how fraud occurs, and why some victims send large sums of money to offenders or take other drastic actions. It’s easy for a rational person to identify these situations as fraud. </p>
<p>Too often, we focus our attention on the <a href="https://eprints.qut.edu.au/83702/">culpability of victims</a> in these situations. But it’s the offenders and their actions we should be focusing on. How exactly do fraudsters get victims to do such outlandish things? </p>
<h2>Grooming the victim</h2>
<p>In many cases, it’s a culmination of efforts that result in the victim sending money or complying with a fraudster’s request. Some offenders target specific victims and build a profile of them through online or offline tracking. </p>
<p>In other cases, the contact may start as random, but the fraudster will work hard to establish trust and build rapport. </p>
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Read more:
<a href="https://theconversation.com/new-virtual-kidnapping-scam-targeting-chinese-students-makes-use-of-data-shared-online-96910">New 'virtual kidnapping' scam targeting Chinese students makes use of data shared online</a>
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<p>There is research to support the concept of “<a href="https://academic.oup.com/hcr/article-abstract/37/1/58/4107489">hyperpersonal</a>” relationships, or ones that are developed more intensely and quickly online compared to offline. Online communication lacks the non-verbal cues that could raise suspicions on the part of a victim. </p>
<p>Further, there is power in the written word. Several fraud victims <a href="https://academic.oup.com/bjc/advance-article-abstract/doi/10.1093/bjc/azy005/4935144?redirectedFrom=fulltext">I interviewed in my research</a> told me they saved all their chat logs with their offenders from the first contact. Re-reading these conversations allows them to feel a deeper connection to the words – and the person sending them – compared to a verbal conversation. </p>
<p>By being persistent and patient with their contact, fraudsters raise few red flags when they ask a victim for money. Many victims come to believe the situation they are being presented with and the reason behind the request. </p>
<h2>Social engineering techniques</h2>
<p>Online offenders are also able to identify a weakness or vulnerability in a person relatively quickly and decide on the appropriate strategy to exploit this. </p>
<p>The use of authority to gain trust and compliance is commonplace. Offenders will take on the identity of a person or organisation and use this to threaten victims into submitting to their requests. Fear can be a strong motivating factor. </p>
<p>This is why so many people fall for phishing emails, or those that appear in our inboxes from a bank or government organisation. These emails say there is a problem and threaten a negative consequence (such as the closure or freezing of a bank account) if their instructions are not followed. </p>
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Read more:
<a href="https://theconversation.com/the-abuse-tactics-fraudsters-use-to-break-the-hearts-and-wallets-of-those-looking-online-for-love-93663">The abuse tactics fraudsters use to break the hearts and wallets of those looking online for love</a>
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<p>A sense of authority has been clear in the recent scams targeting Chinese students in Melbourne who have been <a href="https://www.theage.com.au/national/victoria/kidnap-scam-ends-with-melbourne-students-tied-up-and-money-extorted-20180604-p4zjdl.html">tricked into staging their own kidnappings</a>. The victims receive calls from the Chinese “police” or some other authority and are told there is a problem with their visa, or that they have been involved in criminal activity. </p>
<p>In order to prove their innocence, the victims are asked to send money. Or, they are directed to stage their own kidnapping, with the intention of extorting money from their families. The threat of deportation and jail time are powerful motivators for victims, who genuinely fear for their safety. </p>
<p>The use of scarcity – the idea of a limited offer – is another successful technique of fraudsters. By implying their request has a limited timeframe for response, or that the promised reward is limited in availability, they compel people to respond. </p>
<p>Examples of scarcity are commonly seen with lottery scams and sales frauds. Earlier this year, for instance, <a href="https://www.scamwatch.gov.au/news/dont-fall-for-a-scammers-puppy-dog-eyes">Scamwatch</a> reported that fraudsters were advertising pedigree breeds of puppies for sale, often demanding money up front to cover transport or medical costs. Victims were duped out of over AU$300,000 in a single year. </p>
<h2>Coercive control</h2>
<p>The use of psychological abuse tactics by online fraudsters also helps to explain why they have so much power over victims despite a lack of physical proximity.</p>
<p><a href="http://psycnet.apa.org/record/1992-97990-014">Richard Tolman</a>, a professor of social work at the University of Michigan, identified nine techniques of psychological abuse used by offenders in situations of domestic violence. <a href="https://academic.oup.com/bjc/advance-article-abstract/doi/10.1093/bjc/azy005/4935144?redirectedFrom=fulltext">In an exploratory study</a>, my colleagues and I were able to apply many of these to the context of fraud. </p>
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Read more:
<a href="https://theconversation.com/why-we-need-to-do-more-for-the-victims-of-online-fraud-and-scams-59670">Why we need to do more for the victims of online fraud and scams</a>
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<p>In these cases, offenders employ abusive techniques in their communications to gain compliance at the beginning and maintain it throughout the fraud. In my research, several victims reported being verbally abused when they questioned the nature of the relationship or refused to send money.</p>
<p>Several victims felt the offenders were deliberately leading them to question themselves or their own judgement. This destabilisation is not exclusive to romance fraud and can allow offenders to exploit victims over long periods of time. </p>
<h2>Fighting against fraud</h2>
<p>The pervasive nature of these tactics is difficult to guard against. Most people do not believe they are vulnerable to fraud and are not aware how they could be deceived. Offenders rely on this. </p>
<p>There is also a <a href="https://eprints.qut.edu.au/61011/">strong stigma</a> attached to falling prey to scams. Victims are often blamed for their own circumstances and losses. This exacerbates the suffering they’ve experience at the hands of the offender. </p>
<p>It’s important to raise awareness of the pervasiveness of this type of fraud and the methods used by offenders to target victims. Promoting a culture in which we can openly <a href="https://www.youtube.com/watch?v=TRDgOGf5VAM">talk about fraud</a> without judgement or blame is critical to achieving this.</p>
<p>After all, offenders rely on the silence of victims most of all to continue committing these crimes. In order to break through the silence, we need a better understanding of the techniques they use and more work to identify successful countermeasures and prevention messages.</p><img src="https://counter.theconversation.com/content/99523/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cassandra Cross has received funding from the Criminology Research Grant Scheme. </span></em></p>Australians have lost more than $76 million to fraud so far this year. These are the tactics that online offenders use to dupe their victims.Cassandra Cross, Senior Lecturer in Criminology, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/972582018-05-30T05:12:14Z2018-05-30T05:12:14ZMore than just money: getting caught in a romance scam could cost you your life<figure><img src="https://images.theconversation.com/files/220893/original/file-20180530-80629-1g79ir9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Maria Exposto (centre), as she was escorted by the high court in Malaysia in December 2017. </span> <span class="attribution"><span class="source">EPA/Farzy Ismail</span></span></figcaption></figure><p>When Sydney grandmother Maria Exposto was last week <a href="https://www.smh.com.au/world/asia/australian-grandmother-maria-exposto-sentenced-to-death-in-malaysia-20180524-p4zhch.html">sentenced to death</a> by a Malaysian court for drug trafficking, she wasn’t the first Australian to be caught overseas with drugs, or to face the death penalty as a result. </p>
<p>What is both unique and troubling about the 57-year-old’s case is that she is the first known Australian to be handed the death penalty as a result of romance scam. </p>
<p>The Australian and Competition Consumer Commission’s <a href="https://www.accc.gov.au/publications/targeting-scams-report-on-scam-activity/targeting-scams-report-of-the-accc-on-scam-activity-2017">Targeting Scams</a> report, also out last week, revealed that A$42 million was reportedly lost to romance fraud by Australian victims in 2017.</p>
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Read more:
<a href="https://theconversation.com/a-record-340-million-lost-to-fraud-in-australia-says-latest-accc-report-96912">A record $340 million lost to fraud in Australia, says latest ACCC report</a>
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<p>But Maria Exposto’s case shows that the consequences of romance fraud are not just financial. It could cost you your life.</p>
<h2>Maria’s case</h2>
<p><a href="http://www.abc.net.au/news/2014-12-14/australian-woman-faces-death-penalty-for-drugs-in-malaysia/5966580">Maria Elvira Pinto Exposto was arrested</a> in Kuala Lumpur Airport in 2014, with more than 1kg of crystal methamphetamine sewn into her suitcase. Throughout her arrest and <a href="https://www.smh.com.au/world/australian-grandmother-on-drug-ice-charges-in-malaysia-maria-elvira-pinto-exposto-may-be-victim-of-a-military-romance-scam-20141221-12blrt.html">subsequent court case</a>, she maintained that she was the victim of romance fraud. </p>
<p>The original 2017 court decision regarding Maria’s case was significant. <a href="http://www.abc.net.au/news/2017-12-27/maria-exposto-drug-trafficking-sentence-in-malaysia/9287906">She was found not guilty of drug trafficking charges</a>, the judge Dato Ghazali accepting that she had been duped into carrying drugs by her online boyfriend.</p>
<p>The judge reportedly accepted that Maria had been groomed for more than two years by a man online claiming to be in the US military. Her trip through Malaysia was the result of his request to pick up a bag and travel with it from Shanghai to Melbourne. </p>
<p>This was the first time that a judge had recognised romance fraud as a mitigating factor in favour of the accused, and delivered a not guilty verdict. </p>
<p>But on appeal last week, this original ruling was <a href="https://www.news.com.au/world/asia/sydney-grandmother-sentenced-to-death-by-hanging/news-story/aefa4493c952267620bd38731751734a">overturned</a>. Maria was found guilty of drug trafficking and will now face death by hanging. Her lawyers are said to be <a href="https://www.theaustralian.com.au/news/nation/sydney-grandmother-maria-exposto-awaits-fate-in-last-room/news-story/22a99e9ebcadc59cca1e01fccbc1f8b2">considering a new appeal</a>.</p>
<h2>Not the only one</h2>
<p>Sadly, Maria is not the only victim to be held in an overseas jail as a consequence of falling victim to romance fraud. There are many others who have reportedly faced similar circumstances.</p>
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<li><p>Fellow Australian <a href="http://www.abc.net.au/news/2015-06-18/crime-syndicate-duping-elderly-into-trafficking-drugs/6555984">John Warwick</a>, aged 64, died in a Chinese police hospital in 2015, awaiting trial for charges related to the carrying of 1.9kg of methamphetamine.</p></li>
<li><p>New Zealand woman <a href="http://www.abc.net.au/news/2016-05-30/romance-scam-woman-shares-story-of-being-conned-jailed/7456300">Sharon Armstrong</a> spent two and a half years in an Argentinean prison after being arrested at Buenos Aires Airport in 2011 with more than 5kg of cocaine.</p></li>
<li><p>British professor <a href="http://www.dailymail.co.uk/news/article-2177693/Professor-Paul-Frampton-British-scientist-68-arrested-trying-smuggle-cocaine.html">Paul Frampton</a> was arrested in 2012 at Buenos Aires Airport with 2kg of cocaine. He was <a href="https://www.aps.org/publications/apsnews/201301/uncphysicist.cfm">sentenced to 4 years and 8 months in prison</a>.</p></li>
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<p>In each case, the scenario is identical. Each of the accused was involved with a partner they had met online. Each was travelling at the request of their partner. Each had accepted a suitcase from their partner (or partner’s associate), which had drugs sewn into the lining. </p>
<h2>Changing the narrative</h2>
<p>For too long, victims of romance fraud have been dismissed as <a href="https://eprints.qut.edu.au/61011/">foolish, naïve and responsible</a> for their own victimisation. The severity of the impacts and consequences of romance fraud are ignored. The role of the offender in all of this is invisible and therefore absent.</p>
<p>There is evidence to suggest that romance fraud offenders are using <a href="https://academic.oup.com/bjc/advance-article/doi/10.1093/bjc/azy005/4935144">psychological abuse</a> and <a href="https://theconversation.com/the-abuse-tactics-fraudsters-use-to-break-the-hearts-and-wallets-of-those-looking-online-for-love-93663">coercive control</a> techniques established in the domestic violence literature to perpetrate these offences. They are highly skilled individuals who use every means possible to deceive, manipulate and exploit victims. </p>
<p>For most victims, this means the loss of money. But for others it is far more serious and can also pose a risk to their physical safety. Victims can often be persuaded to travel overseas to meet with their partner, as demonstrated above. </p>
<p>Apart from potential exploitation as a drug mule, it can also expose them to <a href="https://www.bbb.org/en/us/article/news-releases/17057-online-romance-scams-a-bbb-study-on-how-scammers-use-impersonation-blackmail-and-trickery-to-steal-from-unsuspecting-daters">kidnapping, ransom and extortion</a>.</p>
<p>In the tragic case of Western Australian grandmother <a href="http://www.scamnet.wa.gov.au/scamnet/Scam_types-Dating__romance-Death_of_WA_romance_fraud_victim.htm">Jette Jacobs</a>, it resulted in her death, allegedly murdered by her online lover Jesse Orowo Omokoh, who had defrauded her of more than A$90,000. </p>
<h2>A dark future</h2>
<p>The statistics on romance fraud are staggering. Importantly, they are not declining, with the ACCC also reporting that <a href="https://www.accc.gov.au/publications/targeting-scams-report-on-scam-activity/targeting-scams-report-of-the-accc-on-scam-activity-2016">A$42 million</a> was lost to romance fraud in 2016.</p>
<p>Behind each statistic is a person: a mother, father, brother, sister, grandmother, grandfather, friend or colleague. Each one of them could have been facing the same situation as Maria. We need to shift the discussion of romance fraud away from the allure of victim culpability. </p>
<p>Instead, we need to acknowledge it for what it is: a serious crime that poses severe, ongoing and potentially deadly consequences to thousands of Australians, perpetrated by highly skilled, expert offenders. </p>
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Read more:
<a href="https://theconversation.com/the-abuse-tactics-fraudsters-use-to-break-the-hearts-and-wallets-of-those-looking-online-for-love-93663">The abuse tactics fraudsters use to break the hearts and wallets of those looking online for love</a>
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<p>Romance fraud is about more than just financial losses. It is also more than just the loss of a relationship. Instead, romance fraud can mean the loss of freedom for those who are unwittingly caught up in criminal justice systems across the globe.</p>
<p>Tragically, in the case of Maria Exposto, it could result in the loss of her life. </p>
<p>How many more lives need to be affected before we decide that romance fraud is a serious problem worthy of our attention? </p>
<h2>Tips for avoiding romance fraud (adapted from <a href="https://www.scamwatch.gov.au/types-of-scams/dating-romance#protect-yourself">Scamwatch</a>)</h2>
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<li><p>Never send money to someone that you have met online</p></li>
<li><p>Never agree to carry packages, or accept suitcases or bags from someone you have met online </p></li>
<li><p>Always assume that the person you are communicating with may not be genuine</p></li>
<li><p>Consider carefully any requests to travel (domestically or overseas) to meet someone you have met online. Seek advice from family and friends and study any warnings on <a href="http://smartraveller.gov.au/Pages/default.aspx">Smartraveller</a> </p></li>
<li><p>If you have any concerns or suspicions about someone you have met online, talk to a family member or friend, or contact authorities. Don’t feel pressured to respond in the moment. </p></li>
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<p>If you have been the victim of romance fraud, you can report or seek assistance via the Australian Cybercrime Online Reporting Network (<a href="https://www.acorn.gov.au/">ACORN</a>), <a href="https://www.scamwatch.gov.au/">Scamwatch</a>, or <a href="https://www.idcare.org/">iDcare</a>. </p>
<p>If you need to talk to someone as a result of romance fraud, you can contact <a href="https://www.lifeline.org.au/">Lifeline</a> on 13 11 14.</p><img src="https://counter.theconversation.com/content/97258/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cassandra Cross has received funding from the Criminology Research Grants Scheme, Australian Institute of Criminology. </span></em></p>Millions of dollars are lost each year by Australian’s caught in romance scams. But one Australian grandmother now faces paying a much higher price: she’s been sentenced to death.Cassandra Cross, Senior Lecturer in Criminology, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.