Consumers Warned as Online Fraud Soars

The Australian Competition and Consumer Commission recently reported a 65 per cent jump in online shopping scams, and Australian Bureau of Statistics surveys show more than half of all Australians now buy and sell on the internet. More than 8000 victims of online shopping frauds complained to the ACCC last year, and their losses totalled $4,038,479.

Rickard says, “Although we work closely with law-enforcement agencies, there's no use in referring every single scam to police”.

''The crimes are increasingly sophisticated and regularly committed from overseas. They use complete replicas of legitimate shopping sites, for instance, organised crime is involved, and there is great difficulty in identifying the perpetrators.

There are thousands of scams targeting online shoppers, and the stings vary from brilliant to banal. Some try to sell your house while you're on holiday, but the most common involves online shoppers who pay for something advertised online - it could be anything from perfume to a parrot - then find to their dismay that the goods never arrive, and the advertiser turns out to be a fraudulent or non-existent entity.

The swindles are not confined to internet shoppers. Online sellers are being targeted just as heavily, and overpayment scams are one of the most frequent traps.

Detective Senior Sergeant Peter Endler of the Victorian fraud squad disagrees that police are powerless, but admits only the most serious cases are dealt with. ''Many fraudsters know this so they rely on volume and keep the value of individual scams down, knowing they're likely to fly under the radar,'' he says.

''We use terms like 'high victim impact'. If a major bank loses $5 million, and in another case a retired couple loses all their life savings of $200,000, we would see that fraud as having much higher impact than the one on a major bank.''

One restriction on police is that they can only prosecute a fraud that has taken place within their state, and an internet crime is deemed to have been committed where the fraudster is - not where the victim lives. 

It's worth noting that this story deals only with online shopping scams, which represent 10 per cent of the electronic communication frauds reported to the ACCC. There is one huge piece of good news in all this i.e. victims of online shopping scams will almost certainly get their money back, provided they use banking facilities such as credit cards or an account transfer.

The ACCC says 88 per cent of those reporting scams suffered no financial loss and Australian Bankers Association chief executive Steven Munchenberg  says, all bank customers will be protected from loss in genuine fraud cases, including if goods fail to arrive, or arrive broken or faulty.

Commonwealth Bank spokesman Steve Batten backed this up. ''Customers who respond to any online advertisement - including scheme card payments facilitated via PayPal - have the option of initiating a charge back in the event of purchasing goods and not receiving them,'' he says.

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Write by: RC - Sunday, August 11, 2013