InQueensland

NEWS •⁠ POLITICS •⁠ BUSINESS •⁠ CULTURE

Get InQueensland in your inbox Subscribe

Bitcoin scams cost $70 million as ripoffs on the increase

Business

Bitcoin and cryptocurrency scams were now costing investors about $70 million a year, as the consumer watchdog reported a huge spike in ripoffs.

Print article

The Australian Consumer and Competition Commission said investment scams reported to its Scamwatch division had cost Australians more than $70 million in the first half of this year, more than the total losses reported to Scamwatch for all of 2020. Projected losses were set to reach $140 million by the end of the year.

Data from Scamwatch showed a 53.4 per cent increase in scams tipoffs received so far. The total is currently 4763.

ACCC deputy chair Delia Rickard said investment scams were more prevalent than ever and scammers were capitalising on interest in cryptocurrency in particular.

“More than half of the $70 million in losses were to cryptocurrency, especially through Bitcoin, and cryptocurrency scams were also the most commonly reported type of investment scam, with 2,240 reports,” she said.

The strategy of the scammers was not unlike other investment scams where they claimed to have highly profitable trading systems based on individual expertise or through algorithms they developed. The use of fake celebrity endorsements was also common.

Small returns were initially paid but the ACCC said these funds usually came from other victims which is typical of a Ponzi scheme. However, scammers soon claim problems with making withdrawals and cut off contact.

“Be wary of investment opportunities with low risk and high returns. If something sounds too good to be true, it probably is,” Rickard said.

Losses to investment scams involving Bitcoin have already reached $25.7 million this year, compared to $17.8 million across all of 2020, representing a 44 per cent increase.

Losses to other types of investment scams, including imposter bond scams, Ponzi scams, and romance baiting scams were also increasing, while traditional investment scams were also still very common, the ACCC said.

Older Australians looking for well-known respected companies to invest their money in have been the most impacted, making up 43 per cent of reports and accounting for almost half of the losses.

“These scams are particularly hard to detect because scammers use the companies’ legitimate prospectuses which are registered with ASIC, link to the actual websites and have the correct ABN/ACN details. However, the scammers change key details such as contact information and bank details,” Rickard said.

“That’s why it’s really important to contact the company using details you source yourself from doing a search online or visiting the company’s website directly, and to seek independent advice no matter how confident you feel.”

Ponzi schemes have also increased. In the first six months of this year, Scamwatch received over 400 reports and more than $1 million in losses to the Hope Business and Wonderful World scams.

These scams used advertising on social media sites and had their applications available via official app stores. People invested their money and were able to make small withdrawals in the beginning before the scammers cut off contact.

Investment scams originating through dating apps and websites are also becoming increasingly common. In these scams, a scammer develops a relationship with the victim and convinces them to invest, usually in cryptocurrency or bond scams.

“These scams predominantly impact younger people, who might be seeing these ‘investment opportunities’ through social media, recommendations from friends, or by registering their interest in cryptocurrency on questionable websites,” Rickard said.

 

More Business stories

Loading next article