While I have previously written about scams I thought it was time for an update. The internet has opened up new business opportunities, and revolutionised the way we access information (anyone remember crystal sets?) but it also increases the risk of frauds.
The 2007 Australian Bureau of Statistics (ABS) estimated that Australians lost nearly $1billion to fraudsters each year, a large part of which involved internet and email scams as well as the usual credit card and other frauds.
My family may be part of the statistics. About 2007 we were holidaying in Bali and decided to leave the motorbikes, noise and pollution of Kuta and head for the more rural areas. When we returned to Kuta we discovered we were missing a credit card which presumably had fallen out of a wallet at our hotel. We immediately got onto our bank but by then over $12,000 had been used on the credit card! Fortunately we were covered by our insurance but it was a frightening example of what can go wrong.
While most of us are awake to emails notifying us that a long lost twentieth cousin has left us a small fortune, and all we have to do is provide our bank account details, sometimes things come out of left field like our Bali credit card fraud!
The ABS’s 2007 survey into the incidence of personal fraud in Australia found that in the 12 months prior to the survey around 806,000 people actually fell victim to at least one incident of personal fraud. Over 5.8 million Australians were apparently exposed to a scam in the 12 months prior to the survey.
These statistics were accentuated for internet users by the fact that around 76,000 incidences of credit card fraud by email or internet and 26,000 incidences of identity theft were perpetrated through email or internet web browsers. Around 110,000 people apparently lost over $1,000 and nearly 12,000 lost $10,000.
The internet clearly provides a good platform for more scams. Fake lottery wins, bogus high-return investment schemes, chain letters and advance fee scams are conducted using the internet in many cases - the remainder being via telephone, post and in-person appearances.
The statistic most worrying to older Australians and soon-to-be retirees is the large number of over-55 year olds falling victim to such scams. Of the 5.8 million Australians exposed to scams during the survey period over-55s comprised nearly 30% of that number, despite having a much lower use of internet technology compared to their younger counterparts.
But what protection, then, is provided for victims of internet fraud under Australian Law? This is a complex question with a very simple, and very unfortunate practical answer.
Internet scams easily fit within the definition of ‘deception’ in the Criminal Law Consolidation Act (SA) and its equivalent legislation in other states. The Electronic Transactions Act (Cth) also provides a useful preliminary framework for the regulation of contracts made over the internet when combined with existing contract law, which has many remedies for repudiating contracts obtained by fraud or duress.
The practicality of enforcing these laws unfortunately is easier said than done where the scammer is overseas based which is often the case (ie Nigeria).
I doubt if my insurer recovered our $12,000. And I doubt if I would recover any money drained from my bank account (or more realistically taken from my credit account) if I gave my bank details to the overseas Executor of some long lost twentieth cousin’s Estate.
Internet users need to employ caution in their online activities and educate themselves about the risks involved in using the internet. Most importantly, as I have said in past articles it is best to apply the old saying ‘if it seems too good to be true, it probably is’ and push the "delete" button on your computer when you are told the good news about the unexpected windfall inheritance.