Dating and romance scam victims lost at least $25 million in 2016, with victims reporting a rise in scammers recording and photographing victims in compromising acts and using the images to extort money.
According to the latest report by the Australian Competition and Consumer Commission, dating and romance victims were the largest scam category reported to the agency in 2016, followed by investment scams at $23.6 million.
The report said a rising trend among dating scammers was “sextortion”, where the scammer uses social media to make initial contact with the victim, then recording them in compromising positions and using the images or videos to blackmail the victims.
In one real-life based case study, “Daniel” reported falling for a woman who contacted him through a Facebook private message and then used Skype to record “Daniel” performing compromising acts in front of the camera.
The woman then threatened Daniel if he didn’t wire transfer almost $2000 immediately to Manila, the video would be shared on his Facebook profile for all his friends and family to see.
“Daniel” paid the scammer, but in a manner reminiscent of an episode of the popular British TV series Black Mirror, the scammer still shared the compromising video on Facebook and YouTube for all his family and friends to see.
In another real-life based scenario, “Dianne” reported being befriended by “Emil” on Facebook, who said he wanted a relationship but asked her for $150,000 so he could return from India for business, collect “Dianne” and take her back to America. When she said she couldn’t pay, “Emil” got very angry, harassed her constantly and insisted he still wanted to marry her.
According to the report, when “Dianne” paid him $20,000 she didn’t hear back from him again.
ACCC deputy chair Delia Rickard said she had seen a rise in cases where romance scam victims were approached on social media, predominantly Facebook, when they were not even looking for love. She said major targets for dating and romance scams were Australians aged 55 or over, but victims came from all different backgrounds, nationalities and sexual preferences.
“Everybody can be vulnerable to wanting to make connections through social media,” she said.
She advised people not to accept friendship requests from strangers, keep social media privacy settings strong and use Google image search because often scammers use stolen photos of army officers and successful business people.
Another key scam area reported to ACCC was investment scams, where victims reported a financial loss of $23.6 million in 2016.
Ms Rickard said a common investment scam scenario involved cold calls from scammers who came up with offers that sounded fantastic, such as binary options trading.
“It’s a very, very sophisticated, organised crime. It is typically based offshore and they tend to employ people who can speak the jargon and have polished English accents. They will spend an awful lot of time and effort grooming people to get them to put money into their bank account,” she said.
She said one of the most concerning trends was the four-fold increase in hacking scams from $700,000 in 2015 to $2.9 million in 2016, with businesses being hit the hardest.
Such hacking scams typically involved the scammer accessing a business email address and customer lists, sending an email to customers pretending to be from the business, advising new payment arrangements and requesting an immediate bank transfer to a new account.
In some cases, the scammer will impersonate the chief executive officer of the business and send an internal email to the accounts department redirecting payment of an invoice to a scammer.
“It affects businesses at all levels, both big and small businesses have been stung by that,” she said.