SMSFs, tempted by higher yields, should read this report first. Trustees, in the scramble for yield in a lower interest rate environment, would be well advised to read the Australian Competition and Consumer Commission’s (ACCC) seventh annual report on scams activity.
By far the most concerning trend in the ACCC’s data related to investment scams, which overtook dating and romance scams as the category with the largest financial losses reported by Australians in the last year.
Losses to investment scams almost doubled, from $12.5 million to $24.4 million with six people reporting individual losses of $1 million or more. One of the more concerning trends however is touched upon in this line from the report. “While the number of reports we received are spread across all age groups, it is middle aged and older Australians who are reporting the highest losses.”
According to the ACCC, common ploys fraudsters use to entice investors include offering high-yields, quick returns, low up-front investments, low or no risk and inside information. Often, these scams are spruiked to the unwary by telemarketers cold-calling, use slick, scripted pitches to cover any and all angles available.
The ACCC said it is increasingly concerned that scammers will be setting their sights on older Australians to access their superannuation funds via investment scams.
While phone scams remained the most common, ACCC found that 38% of scam approaches occurred through email, over the internet or through a social network platform, and accounted for 44% of losses. “These forms of communication give scammers the advantage because they provide anonymity, global reach and a cheaper means of engaging in their deceptive practices,” the report said.
For this year’s report the ACCC has also reviewed data from other jurisdictions that receive reports or detect scams to gain a clearer picture of the significance of losses caused by scam activity in Australia. Reports to the Australian Cybercrime Online Reporting Network (ACORN) revealed losses of over $127 million.
Download the full ACCC scam report here. The following infographic highlights some key statistics and trends from the report.