Nobody immune to identity theft as fraudsters turn their focus to investors

Wealthy, educated Australians looking to invest have become prime targets for the new breed of fraudster who are concocting elaborate scams designed to lure their hard earned savings. A national credit repairer says this demonstrates that the threat of fraud and identity theft is not limited to the naïve, but for all Australians.

CEO of MyCRA Credit Rating Repairs, Graham Doessel says victims of the latest very sophisticated investment scams probably did not think they were in a high risk group, but he warns that all need to be on edge about where we could get caught out.
“We need to get away from this idea that somehow those people that fall for scams are gullible. This is simply not true in all cases. Identity theft is the new black in criminal circles, and some of those criminals are willing to go to great lengths to fool their victims - particularly if the profits are lucrative,” Mr Doessel says.

The Australian Crime Commission and Australian Institute of Criminology reported this year that more than 2600 Australians have lost in excess of $113 million to this type of investment fraud, but it is believed there is a high level of under-reporting and the extent is far greater. (1)

They warn that the scam is incredibly sophisticated and has fooled even experienced investors with elaborate back up data, including fake websites and publications and fraudsters even issuing online press releases in the hope of extracting major dollars from their victims.

Australians have been targets for this fraud because of high levels of superannuation and retirement savings. The Australian economy is also known to have been less affected by the global financial crisis than other nations.

Mr Doessel says victims can lose their nest egg, and can also have their identity hijacked and potentially credit taken out in their name, which can rob them of the ability to obtain credit in the years when they will need it most.

“Many people in this age group will generally have a good clean credit rating, and fraudsters can use the personal information they become privy to in order to set up a fake identity. This gives them access to huge amounts of credit in their victim’s name as well,” he says.

He goes on to say “Fraudsters are never so kind as to pay the credit back -meaning the identity theft victim is hit twice - financially ruined and with no ability to borrow for 5 to 7 years due to bad credit history.”

The Australian Bureau of Statistics data shows 514,500 Australians were victims of scams in 2011, with 44,700 people citing actual identity theft in the same year. (2)

Credit reporting agency Veda Advantage also recently reported in its Australian Debt Study that one in five Australians have had their identities stolen or had their personal or financial data illegally accessed. (3)

Matthew Strassberg, a Veda senior advisor said: “Whilst credit card fraud is a common form of identity crime, many people do not realise that with only a small amount of personal data, an identify thief could take out a second mortgage on a house, or open up a new line of personal credit and purchase items in their name or under a false identity."

Mr Doessel says pinpointing identity and credit fraud early can be difficult.

“Fraudsters often change contact details, and many victims don’t know they have been scammed until they apply for credit and are refused,” he explains.

He says sometimes there can be some early warning signs of identity theft, and people should watch out for these occurrences:

1. Strange unaccountable withdrawals on credit or personal bank accounts. It may not need to be a big amount to indicate fraud. Many criminals do ‘test’ amounts to begin with before extracting more significant amounts.

2. Phone calls or emails from what often appear to be legitimate companies, asking for money or personal details. If you have given bank details or personal information in this way either online or on the phone there is a high chance it was a scam. Verify with the company in question.

3. Can’t log in to social networking or bank accounts.

4. Bills or letters of demand sent to you for accounts you don’t know about.

5. Missing mail – particularly credit card statements which could indicate someone has overtaken your accounts. In this case no news is not good news.

6. Credit refusal due to a bad credit rating.

If people feel they may be vulnerable to identity theft, they should alert their creditors, and also alert credit reporting agencies, who may be able to ‘flag’ their accounts to prevent fraudsters accessing credit in their name.

Mr Doessel says regular credit checks are vital – and if a credit check reveals any “surprise bad credit” through possible identity theft - victims should act immediately to notify Police.

“This crime is not very widely reported. But it is only through people reporting it that any real statistics get collated. Likewise, if people want to try and repair their credit rating following identity theft, the first thing I tell them is to make sure they have a Police report,” he says.

For more information on restoring a credit rating following identity theft, contact MyCRA Credit Repairs on 1300 667 218 www.mycra.com.au.