Australians reported losing $382 million to investment scams in the 2023-24 financial year. Nearly half of the investment scam losses involved cryptocurrency.

Australians reported losing at least $180 million of cryptocurrency in investment scams in just 12 months, with victims now more likely to be under the age of 50 years, according to a press release.

Acknowledging there are members of the public under financial pressure, the Australian Federal Police (AFP) is urging all Australians to be extra aware of the proliferation and sophistication of scams – especially offers that appear too good to be true.

The AFP-led Joint Policing Cybercrime Coordination Centre (JPC3) is revealing new data that shows nearly half of all investment scam losses reported to police involve cryptocurrency.

The data also shows people under the age of 50 overtaking older Australians as the most reported victims of investment scams.

The data, collected by the Australian Cyber Security Centre (ACSC) through reports made to police via cyber.gov.au, and released by the JPC3, shows that Australians reported losing $382 million to investment scams in the 2023-24 financial year. Nearly half (47 per cent) of the investment scam losses involved cryptocurrency.

During this period, Australians aged under 50 years made up about 60 per cent of the overall investment scam reports made to police through ACSC’s cyber.gov.au.

AFP Assistant Commissioner Richard Chin said the data revealed that it was a misnomer that only older people were victims of scams.

Assistant Commissioner Chin said: “Investment scams are fraudulent schemes that deceive people into investing money under false pretences. Scammers promise high returns with little risk, using convincing marketing and new technology to make the investment sound too good to miss.

“Scammers often use pressure tactics and different methodologies to lure victims into making poor investment decisions, with two common methods being pig butchering and using deepfake technology.”

He said investment scams were often underreported as individuals were either not aware they were victims, or too embarrassed to report the crime to authorities.

“The AFP and its policing partners work closely with the banking industry and digital currency exchanges to assist victims of investment scams and try to recover money lost to scammers. Remember, don’t feel pressured to invest. If you have any doubts, stop communicating, and always get independent financial advice before you invest.„

“If you believe you are a victim of an investment scam, notify your financial institution or digital currency exchange and alert police through cyber.gov.au. We also urge victims to stop all communication with the scammer, move any funds from the account the scammer can access to another account, remove any authorisations given to them, and do not make further transfers.”

How scammers operate – Common tactics

Pig butchering

Pig butchering is a tactic where scammers devote weeks or months to building a close relationship with their victims on social media or messaging apps, before encouraging them to invest in the share market, cryptocurrency, or foreign currency exchanges. Inexperienced investors and lonely individuals are often the target of this tactic.

Victims think they are trading on legitimate platforms, but the money is siphoned into an account owned by the scammers, who created fake platforms that look identical to well-known trading and cryptocurrency sites.

Scammers will show fake returns on these platforms to convince victims to invest more money. Once they have extracted as much money as possible, the scammers disappear with all the invested funds.

When the victims realise that they’ve been scammed and stop communicating with the scammers, the scammers will often contact them purporting to be from a cryptocurrency recovery business, claiming they can recover the lost funds for a fee. This is a false claim by the scammers and designed to further scam the victims.

Deepfakes

Deepfakes are lifelike impersonations of real people created by artificial intelligence technologies. Scammers create video ads, images and news articles of celebrities and other trusted public figures to promote fake investment schemes, which can appear on social media feeds or be sent by scammers through messaging apps.

Some signs of a deepfake video include the person speaking with unusual pauses, odd pitches, or different accents, their face and mouth movements may not match their speaking tone, and the video may be in low resolution.