Australian losses to online marketplace fraud increase as scams become increasingly sophisticated

Consumer groups say online platforms like Facebook Marketplace and Gumtree need to do more to keep customers safe

Wayne Draper and his wife wanted a puppy. When they came across pictures of a new bulldog on Facebook, they instantly fell in love.

The Facebook page it was advertised on had been operating since January 2021, and had seemed to cycle for several litters of puppies. They promised their pups were ANKC (Australian National Kennel Council)-registered, wormed and had a full veterinary health check.

“We saw the video and photos, we looked into it, and it seemed legitimate,” Draper said.

He was asked to fill out a questionnaire, to check if the couple were suitable. Once they were approved, they sent $1,000 to the business to secure the puppy.

“Then the communication slowed down – he said his daughter was in the hospital with a critical injury,” Draper said.

“I said: ‘I’ll bring the rest, $1,500, on the Friday or Saturday when we pick up the dog and go from there.’”

When the business asked for an extra $500 to be transferred through Bitcoin, Draper realised it was a scam. He kept communicating, hoping to get some of the money back.

“I was trying anything to get some money. I couldn’t believe it. I learnt a big lesson from it. Never purchase a puppy like that.”

Eventually, the page stopped responding. On 19 January, he reported it to Facebook – but it is still active.

“I’m disappointed with Facebook,” Draper said. “They haven’t done anything about it. Facebook needs to have more rules in place, and check for scams.”

Meta would not answer how many scams are reported or taken down but said it had increased enforcement against spam.

“We’re investigating the matter. Scammers present a challenge in any online environment, and marketplaces are no exception,” a Meta spokesperson said. “We continue to invest in AI to improve the accuracy of our enforcement and strengthen our review systems.”

The Australian Competition and Consumer Commission says overall reported scams from classified ads are down – but the amount scammers are stealing through these methods is up.

Last year, Australians lost $8,465,443 to classified scams, but many go unreported.

“In 2022 there was a 37% reduction in classified and online shopping scams reported when compared to 2021,” an ACCC spokesperson said.

“Total losses from such scams however have increased by 5%. This indicates that while these scams are impacting less people, those impacted are on average suffering greater losses than in the prior year.”

A cyber security expert at Avast, Stephen Kho, said this was because the scams were becoming more sophisticated.

“What we are seeing is the level of sophistication is going up. Initially, it was just a lot of phishing emails, SMS, and voice mails,” Kho said.

“We’re increasingly seeing really sophisticated scams. Facebook Marketplace, Gumtree and other trading platforms are all affected.”

It’s not just buyers who are getting scammed. Kho was recently selling his car when he was targeted by scammers.

He put up a classified ad, asking $10,000 for the car, and was offered $13,000 from someone who offered to pay that week and have it picked up by a courier.

“You see them pay over PayPal, the $13,000, it appears, then you give the car to the tow truck, then suddenly the money disappears,” he said.

“There’s a mechanism where there’s a clearance time and the payer has a right to withdraw. You think you’ve got the money, you’ve given the car away. And you’ve lost the money.”

As more Australians become aware of common scams, the level of sophistication – including tactics to build rapport and manipulate potential customers – is increasing as scammers find new ways to steal money, he said.

“These scammers are tricking people that previously would be like ‘I’m not going to click on this’,” Kho said.

“It’s a business to them, in the end. Romance scams, super fund scams, the level of sophistication has gone through the roof.”

The incoming chief executive of the Consumer Action Law Centre, Stephanie Tonkin, said buy-and-sell companies needed to do more to keep customers safe.

“Last year the ACCC said that online platforms like Meta, Gumtree and the rest must have much stronger online safeguards against scams,” Tonkin said.

“We totally agree as this is a multi-platform issue and endemic problem – you can’t whack this mole in just one spot and expect it to disappear.”


Cait Kelly

The GuardianTramp

Related Content

Article image
Australia’s consumer watchdog calls for new laws to stop scams and rein in anti-competitive behaviour online
ACCC report says digital platforms expose users and businesses to ‘harms’ as it pushes for overhaul

Anne Davies

10, Nov, 2022 @2:00 PM

Article image
ACCC takes Meta to court over Facebook scam ads depicting Australian identities
Dick Smith, Andrew Forrest among prominent people used on cryptocurrency and other scam ads without approval

Josh Taylor

18, Mar, 2022 @2:01 AM

Article image
WhatsApp and other messaging services left out of new Australian misinformation code, regulator says
Australian Communications and Media Authority wants social media companies to hand over information on how they respond to complaints

Paul Karp

08, Jan, 2023 @2:00 PM

Article image
Meta asks to be spared tighter rules in Australia, saying iPhone’s tracking blocker is hurting business
Company tells consumer watchdog it is set to lose $10bn this year in wake of Apple iOS feature hampering ability to collect user data

Josh Taylor

25, May, 2022 @5:30 PM

Article image
Reining in the digital giants: Rod Sims on the trials and triumphs of a decade as head of the consumer watchdog
Outgoing Australian Competition and Consumer Commission chair reflects on his time as consumer protector and market guardian

Peter Hannam

25, Feb, 2022 @7:00 PM

Article image
Scam ads: why an Australian billionaire is launching legal action against Facebook
‘Clickbait’ advertisements using unauthorised images of celebrities are used to lure victims into fraudulent schemes

Josh Taylor

03, Feb, 2022 @7:01 AM

Article image
SMS scams rise despite success blocking sham phone calls
Industry code credited with helping reduce scam calls by almost 550m since 2020 but text messages said to be more difficult to stop

Josh Taylor

29, Nov, 2022 @6:15 AM

Article image
What is the sound of Facebook’s value crashing? Noisycharts turns news into noise
Rising carbon dioxide and the slump in the pound have been frequently graphed. Now we’ve turned the data and graphs into audio

Nick Evershed

15, Nov, 2022 @7:00 PM

Article image
Losses from ‘heart-wrenching’ puppy scams increase 1,000% over last two years
Australian consumer group Choice says people more vulnerable to being ripped off with fake dogs and cats during Covid pandemic

Natasha May

05, Sep, 2022 @4:58 AM

Article image
Threaten Australian gas companies with export limits to rein in domestic prices, former ACCC boss says
Exclusive: Rod Sims argues federal government needs to be tougher, stating ‘it just needs the threat and I think they will act’

Adam Morton and Peter Hannam

26, Oct, 2022 @3:01 PM