The National Anti-Scam Centre is urging Australians who have had money stolen by scammers to be wary of offers to recover their money for an upfront fee.
Reports that involve a money recovery element are on the rise. Between December 2023 and May 2024, Scamwatch received 158 reports with total losses of over $2.9 million, including losses from the original scam.
The number of reports increased by 129% when compared to the six months prior, however financial losses decreased by 29% from $4.1 million.
Victims of previous scams are easily identified by criminals who commonly keep and sell information about individuals they have exploited.
Australians aged 65 and older were the largest reporting group and suffered the highest average losses.
“Money recovery scams are damaging and cruel. Criminals prey on people who have already been victims of a scam who hope to get their money back. They are another example of scammers’ willingness to exploit people’s desperation at a vulnerable moment,” ACCC Deputy Chair Catriona Lowe said.
“Scammers pose as trusted parties such as government agencies, lawyers, or even charities. We are also aware of criminals pretending to be a victim themselves and claiming that a specific person or entity helped them get their money back.”
“We are very concerned about revictimisation which can compound both the financial and emotional harm caused by scams. For example, we know of a person who was the target of multiple scams in succession. What began as a romance baiting investment scam was followed by a money recovery scam, which led to a remote access scam, and finally identity theft,” Ms Lowe said.
“In other cases, victims unknowingly proactively contacted criminals after seeing advertisements online. As part of our initial response, the National Anti-Scam Centre has referred two websites used in recovery scams for takedown action. One has been successfully taken down already.” Ms Lowe said.
Many scammers promise victims they can recover their losses for an up-front fee. However, even legitimate scam investigation services are rarely able to recover money for scam victims. The National Anti-Scam Centre does not recommend victims of scams engage with services or individuals who claim they can recover stolen money. Victims are encouraged to report the scam to the police and contact their financial institution.
Ongoing losses to scams highlight the importance of introducing mandatory industry codes as soon as possible.
Unfortunately, most money stolen by criminals is transferred offshore very quickly making recovering of funds difficult. The National Anti-Scam Centre considers compensation will be an appropriate and necessary part of external dispute resolution where a business doesn’t meet its legal obligations under the proposed mandatory codes.
“Scams are crimes, and the criminals who prey on desperate people trying to recover in the aftermath are reprehensible. Anyone can be scammed, and that’s one of the reasons drawing attention to Scamwatch’s advice and resources is so important.” Ms Lowe said.
How the scam works
- Criminals contact victims posing as a trusted party such as a government agency, cyber security organisation, fund recovery service, lawyer, consumer advocacy group or charity. They might use email, phone calls, mobile apps, social media or text to contact victims.
- In some cases, victims first encounter the criminals through an advertisement on social media or from searching the web.
- The criminals tell the victims that they can recover their losses for either an upfront fee, a percentage of the lost funds, or a tax payment. They even tell victims that they can track-down lost cryptocurrency.
- The criminals ask for the victim’s personal information under the guise of verifying their identity, or to set up a cryptocurrency wallet to facilitate payments from victims for their services.
- Criminals may also request to remotely access the victim’s devices to obtain personal information and identification details.
- Criminals may also pretend to be a scam victim themselves and claim that a specific person or entity has helped them recover funds. They will refer victims to fake recommendations left on review websites, or by direct contact with people claiming to have been scammed.
- To appear legitimate, criminals may make use of websites advertising their services that look professional or provide victims with detailed guides and other paperwork as part of the ‘recovery’ process.
Stop. Is it a scam? Building our defences with scam sense
Scams are getting harder to spot. They can catch you off guard when you’re not expecting it and make you hurry so you don’t see the warning signs.
When we’re alert, we’re in control. The National Anti-Scam Centre’s Scamwatch can help you see the warning signs and shut things down when they don’t add up.
Follow these steps to protect yourself from scams:
Step 1: Stop.
- If you have been scammed before and see an ad or are contacted by someone with an offer to help recover money for an up-front fee, it’s a scam.
- Say no, hang up, delete and block any repeated attempts of contact.
Step 2: Check.
- Criminals pretend to be from organisations you know and trust. Verify who you’re speaking to by contacting the organisation directly using contact information sourced independently.
Step 3: Protect yourself.
- Never accept offers from anyone who contacts you and says they can get your money back. Make all requests to recover your money to your financial institution and report to the police.
- Don’t give financial, cryptocurrency or account details, or copies of your identity documents to anyone online who you’ve never met in person.
- Never give strangers remote access to your computer even if they claim they are legitimate.
- Only use lawyers that are registered with the official Law Society or Bar Association in your state.
- If a criminal has your money or personal details:
- Call your bank immediately using a number from your banking app or on your bank card.
- Contact IDCARE for support, on 1800 595 160.
- If, after contacting your financial institution you are unsatisfied with their response, you can make a complaint to the Australian Financial Complaints Authority (AFCA – ). AFCA provides consumers and small businesses with fair, free and independent resolution for financial complaints.
Step 4: Report the scam to us.
- The more we talk, the less power they have.
- Report it to stop another person getting caught by this scam.
Background
- An additional challenge for consumers is that there are increasingly a range of businesses that offer investigation, crypto-tracing and asset recovery services to scam victims often at high costs. However, the National Anti-Scam Centre has concerns about the practices of many of these businesses because:
- Only law enforcement authorities have power to seize and recover assets.
- It can be difficult to distinguish between a recovery business and scammers purporting to operate a recovery business.
- Many lack transparency about the services offered, the terms, the costs and their success rate.
- Significant up-front costs are charged for actions victims could otherwise undertake themselves for free, and which are unlikely to result in the recovery of funds.
- While in some cases investigators can trace funds, in practice those funds are almost never returned to the victim. Current National Anti-Scam Centre advice to individuals who have reported a loss via Scamwatch includes a warning not to engage with anyone who contacts them promising to return their stolen money.
