Australians losing $36m a year to scammers - article

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Posted: Wed Aug 20, 2008 12:56 am

This is in today's The Age newspaper.

Quote:

Scammers defraud Aussies of $36m a year: police

Asher Moses
August 20, 2008 - 9:55AM

Australians lose at least $36 million a year to so-called Nigerian scammers who continue to fleece naive internet users because victims fail to report incidents.

Detective Superintendent Brian Hay, part of the Queensland Police fraud squad, said Australians sent about $3 million a month to Nigeria, at least 80 per cent of which was fraud related.

But he said the problem was "far more extensive" than that because police were "well aware" that millions of dollars were going to other countries as part of the same fraud process.

Detective Superintendent Hay said NSW was the biggest victim group "by a mile". He said police struggled to get a handle on the issue because many incidents went unreported.

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MashUp Blog: Are you a victim of a Nigerian scam?
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Nigerian scams, also known as 419 frauds, are typically conducted via email and centre on the target being persuaded to advance significant sums of money in the hope of realising a much larger windfall some time in the future.

There are many variations. In one version, the scammer poses as a government worker who has embezzled millions of dollars and offers victims a percentage if they help retrieve the money by providing a relatively small amount for bribes or other fees.

The victims believe they are investing to make a large profit but, after receiving the money, the scammer disappears or, for the most gullible of victims, continues to ask for more advances.

Some Nigerian fraudsters go as far as setting up fake profiles on dating sites using pictures of attractive men and women. They string along potential targets for months before organising to meet them, but first ask for money to, for instance, help pay for a plane ticket.

Queensland Police recently contacted 139 people who had sent money to Nigeria and found 135 were fraud victims. Some romance scam victims lost $35,000, while businesses who fell prey to Nigerian investment scams - such as the construction of a fictitious oil pipeline - lost up to $5 million.

"I get phone calls very regularly from concerned relatives saying, 'Look, I think my mother or my father is a victim of a scam, they won't listen to us. Could you please contact them and explore this situation for me?' " Detective Superintendent Hay said.

But to the amazement of police, when victims are informed of the fraud they often continue sending money to the scammers out of sheer pride or embarrassment.

"Here they have this dream that their life is going to turn around, all their money problems are finished and they'll be able to have a future ... and we're smashing it against a brick wall. We're saying, 'Sorry, you're a victim and the hundreds of thousands of dollars that you've parted with has been lost,' " Detective Superintendent Hay said.

A 2006 study by research firm Chatham House found Nigerian scams cost the British economy £150 million a year. But the cost to society goes beyond just losing money, police say.

Some victims had attempted suicide while others saw their marriages end and their businesses go bankrupt.

Award-winning poet Anne Fairbairn - the only granddaughter of Australia's fourth Prime Minister, Sir George Reid - has fallen prey to a different version of the Nigerian scam.

She is a perfect example of the type of person targeted by internet fraudsters. See her story here.

To understand the scope of the Nigerian fraud problem and co-ordinate a response, Victorian Police teamed up with the University of Melbourne to investigate 1400 Victorians who had transferred money to Nigeria recently. The results of the survey will be published this year.

Victoria Police Detective Acting Inspector Paul Weller and Detective Superintendent Hay both said most victims were educated professionals and self-funded retirees.

"Many elderly people cannot financially recover once they have been defrauded," Detective Acting Inspector Weller said.

Queensland Police was the first Australian law enforcement agency to put Nigerian scammers on the agenda.

Late last year it brought law enforcement officials, governments and affected industries from around the world together for the National Nigerian Fraud Symposium. In October it will hold the National Advance Fee Fraud Symposium in Brisbane to build on strategies developed at last year's conference.

NSW Police did not respond to requests for comment on this story, while the Australian Federal Police, which houses the Australian High Tech Crime Centre, referred queries to state police.

Posted: Wed Aug 20, 2008 3:42 am

Just saw that on the SMH front page. I hope the print it in the hard copy.

Posted: Wed Aug 20, 2008 7:05 am

Quote:

Queensland Police recently contacted 139 people who had sent money to Nigeria and found 135 were fraud victims

That's what we in the risk-analysis business call "statistically significant".. Sad

Posted: Wed Aug 20, 2008 9:11 am

Article wrote:

But to the amazement of police, when victims are informed of the fraud they often continue sending money to the scammers out of sheer pride or embarrassment.

I saw this in The Age today as well, beat me to the punch, but terrible stuff, $36m?

As if we ever needed any more justification for baiting lads.

Posted: Wed Aug 20, 2008 9:44 am

We all know why we do this, but reading stuff like that still helps. After all, we aren't just sadistic buggers. We need a certain amount of motivation.

Posted: Wed Aug 20, 2008 11:35 am

SMH has a blog with the article.
It's worth a read however most of them blame the victims Sad

I did put a plug in for eater and scamwarners.

Posted: Thu Aug 21, 2008 7:16 am

Educating is just as important as those huge safaris. Sad

419Eater is my life Joined: 10 Jul 2008 Posts: 366

This is part of the link in the original article which descibes a sinister phishing scam

Quote:

Award-winning poet Anne Fairbairn - the only granddaughter of Australia's fourth Prime Minister, Sir George Reid - has fallen prey to a different version of the Nigerian scam.

She is a perfect example of the type of person targeted by internet fraudsters.

In July she received an email, purportedly from her email provider Yahoo, asking her to confirm her account details including her username and password. Unaware the email was bogus, she gave over her details and her account was hacked.

The scammer, posing as Fairbairn, then emailed all of her contacts saying her money had been stolen and she was stuck in Nigeria, urgently requiring $2500 to be transferred via Western Union.

Phishing requires a lot more organization than advanced fee for lottery winnings. All phishing scams have the potential to defraud a lot of money. Most have multiple levels of indirection that often involve using insecure websites whose owners are unaware of the addition of a phishing web page. Data collected is immediately sent elsewhere. Phishing schemes often link to the real site for most of their pages. An IRS modality scam for example was designed to obtain credit card information and passwords pointed to an IRS page on fraud to enhance its legitimacy. The first hop was a bicycle club a continent away whose owners had no knowledge of an extra page.

The important thing about phishing schemes is minimizing time before it is defeated. A bunch of emails are sent out and responses have poisson time distribution. Killing it within a few minutes is important. The IRS one took about 15 minutes assisted by the scammers link to the IRS fraud reporting.

Unlike scambaiting their isn't much of a game involved. I started by following the phishing links and then taking the scripts apart on the spoofed website. If undetected for 3 or 4 hours the scammers can remove the page on the intermediate website and be essentially undetectable. The phishing link for late victims comes up as 404 they are the lucky ones.

p.

Posted: Thu Aug 21, 2008 10:17 pm

Response from Nigerian High Commissioner Shocked

http://www.smh.com.au/news/technology/jail-the-greedy-scam-victims/2008/08/21/1219262419867.html

Posted: Thu Aug 21, 2008 11:29 pm

^
I've highlighted a few snippets from that reply.

Quote:

THE Nigerian high commissioner says people who are ripped off by so-called Nigerian scams are just as guilty as the fraudsters and should be jailed.

Yes, how about the people who thought they were donating to tsunami victims, then?

Quote:

He said media coverage of fraudulent activity stemming from Nigeria had given the country "a bad image" and "those who want to transact business with us are always very suspicious".

Gee, man, I wonder why

Quote:

"It is not in the character of Nigerians to be engaged in this kind of scam."

Well, apart from the 300,000 people in Lagos who do nothing else but scam.

The man is either an outrageous liar, a complete fool, an accomplished conman, or all three. Mad

Posted: Fri Aug 22, 2008 12:11 am

He probably has a go at the odd scam himself Rolling Eyes

I am a little surprised it is only $36 Mil per year, I would have thought it would be higher but then I am sure it is higher as I am certain that many vics do not report it to police.

It is good to see the police acting on this, even if too late, of course it was Qld, they appear to be the only state that is proactive, even if only to find people who have already lost money

Posted: Fri Aug 22, 2008 12:24 am

Did they only check WU? What about MG and bank transfer? And what about fake check scams?
the total lost probably far exceeds $36 mil.

The Nigerian Commissioner is trying to do a PR job. He needs to realize that when a large group of citizens are interacting with the world's population in a negative and criminal manner, said population will take a dim view of the country as a whole. The rest of the citizens had better start being more pro-active in their goodness if they want to erase the bad taste the scammers have put in everyone's mouths.

Posted: Fri Aug 22, 2008 2:44 am

^^^ Qld government as I remember used a figure of $160Million for QLD alone in a report last year.

Posted: Fri Aug 22, 2008 6:44 am

^
Quite likely.

The only way to stop suckers falling for scams in QLD is to issue a whole load of beer coasters saying "You've just won $20m in a lottery..turn over for details" and on the other side saying "...actually you just got scammed. Beware Internet fraud."

I wonder what the going price of beer coasters is.... Surprised

Posted: Sat Aug 23, 2008 12:08 am

^^^ funny you ask that question. I often get people ringing up trying to get you advertise on beer coasters. They always clam they are local then when it comes to payment they are in Fortitude Valley QLD.
Is that Australia's scammer central ? Many years ago I signed up over the phone for a Blue Light Disco book about drugs etc. Single page advertisement. It was to be issued to every child in the local schools. I got sent a copy of the book which they wanted returned Shocked

I checked with the local schools and they never got it. After not paying the bill I was sent a legal letter from a solicitor at the same address as the original invoice Smile

Fortitude valley of course. They never got that $130.00

Posted: Mon Aug 25, 2008 12:27 pm

"Professor Olu Agbi said there were almost 140 million people in Nigeria and fewer than 0.1 per cent were involved."
Fewer than 140,000 scammers then. How many exactly? 139,999?

Posted: Mon Aug 25, 2008 1:39 pm

^^^ I would like to see where he got those statistics from, obviously not the local internet cafe Rolling Eyes

Posted: Mon Aug 25, 2008 3:16 pm

^^Actually the same question had come up in another topic recently, something like: "How many are there?"

Interestingly, this particular lad wrote (just recieved today):

Quote:

WHY CAN'T YOU CALL ME ON MY MOBILE DIRECT LINE SO THAT WE WILL TALK MAN TO MAN, AND I WOULD LOVE TO LEAVE THIS DIRTY GAME THAT AM INTO, IT HAPPENS THAT OUR COUNTRY NIGERIA DO NOT CARE FOR US AND WE DO ALL THIS TO SURVIVE FOR LIVING.

...I think he is saying that a lot of them do it.

Posted: Mon Aug 25, 2008 9:26 pm

Wright B Hindyou wrote:

to issue a whole load of beer coasters saying "You've just won $20m in a lottery..turn over for details"

I thought for sure the other side of that beer coaster was also going to say "You've just won $20m in a lottery..turn over for details".

Posted: Mon Aug 25, 2008 9:45 pm

Quote:

He said media coverage of fraudulent activity stemming from Nigeria had given the country "a bad image" and "those who want to transact business with us are always very suspicious"

.

In 25 years of handling international trade and finance for a major UK bank I have never seen a Nigerian document or payment that wasn't a forgery or fraudulent.

In the most careful way I could, I always told my staff and customers said that any document bearing the word Nigeria was most likely forged or fraudulent. The alternative would be to lie and put people at risk. I saved several small companies from being wiped out by Nigerian fraud, and that's not fat cats losing money, it's workers being made redundant and people facing major debt or losing their homes.

Some years ago an old school friend who was working for an accountant, asked me about an offer he had to go and recover some goods from Nigeria that had been obtained by fraud. My advice to him may have saved his life.

They have no prospect of improving their reputation until they admit the scale of the problem.

Posted: Tue Aug 26, 2008 12:29 am

Quote:

"The Nigerian Government frowns very seriously on these scams … and every day tries to track down those who are involved," he said. "It is not in the character of Nigerians to be engaged in this kind of scam."

I'm grateful to hear this. I wonder if the commissioner would like for us to help him find scammers.

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