By Dr Jamie Ferrill, Discipline Lead and Senior Lecturer Financial Crime Studies, and Dr Milind Tiwari, Senior Lecturer Financial Crime Studies, in the Charles Sturt Australian Graduate School of Policing and Security in Canberra.

The festive season is a time for joy and celebrations, but sadly, heightened financial crime risks.

While fraudulent activities, such as scams and phishing emails, happen all year round, the holiday period presents unique opportunities, such as Black Friday, Cyber Monday, Christmas and Boxing Day, for criminals to exploit.

Mounting online crime

Reported data does suggest a significant rise in financial crime during the Christmas season. For instance, in 2023 alone, the United Kingdom (UK) reported a loss of more than 11.5 million GBP to online shopping scams during the holiday season.

In Australia, in 2022, October and November emerged as peak months for scammers, with close to 50,000 scams reported to Scamwatch.

Consequently, agencies such as the Australian Competition and Consumer Commission (ACCC) and Australian Federal Police (AFP) have urged people to be vigilant to scams during the holiday season as online perpetrators take advantage of stressed and time-poor victims.

Technological innovations have further paved the way for increasing the vulnerability of the population to scams. Advanced tools and technologies enable criminal perpetrators to deceive consumers with increasing sophistication.

For instance, fraudsters can create counterfeit websites or fake social media advertisements offering popular items at attractive prices, thus attracting customers into making purchases which results in non-delivery of goods.

Apart from phishing emails and text messages, scammers engage in parcel delivery scams by prompting recipients to click on malicious links or provide sensitive information.

Many financial crimes targeting holiday shoppers are orchestrated by international networks leveraging sophisticated technology, which makes them challenging to trace.

However, advances in forensic accounting, data analysis and cross-border cooperation among global law enforcement agencies have significantly improved the detection and disruption of these schemes.

While some financial crimes result in prosecution, particularly when perpetrators are operating domestically, the anonymity and complexity of online schemes remain substantial hurdles.

International networks often span multiple jurisdictions, complicating efforts to hold offenders accountable.

Despite these challenges, law enforcement agencies actively pursue high-profile cases involving organised cybercrime and fraud rings, aiming to disrupt large-scale operations and send a deterrent message.

Preventing fraud and scams requires a collaborative effort between banks and consumers

Consumers should exercise caution when offers seem too good to be true, such as luxury goods or popular brands advertised at significantly reduced prices, especially when accompanied by time-sensitive pressures such as ‘limited time only’ deals.

As the old adage goes: If it sounds too good to be true, it probably is.

Additionally, requests for payment through unconventional methods - like wire transfers, money orders, preloaded gift cards, or cryptocurrencies - are often indicative of fraudulent schemes.

Vigilance is also required in scrutinising website URLs for irregularities and being alert to sites lacking comprehensive information or containing numerous typographical errors.

Concurrently, banks are enhancing their protective measures. For example, in November 2023, Australian banks introduced the Scam-Safe Accord, a set of anti-scam measures across the industry.

A key component of this initiative is a $100 million investment in a new confirmation of payee system, designed to ensure that individuals can verify the recipient of their funds before completing a transfer. This system is slated for design and implementation throughout 2024 and 2025.

Furthermore, banks are committing to heightened security protocols, including increased warnings and delays for new payees or elevated payment limits, and the adoption of biometric checks when opening new accounts to prevent identity fraud.

This united front aims to disrupt, detect and respond to scam activities, underscoring the shared responsibility in safeguarding financial transactions.

Stay informed

As opportunities for fraudsters continue to expand, it is crucial to stay informed about fraud and scam prevention.

This includes recognising potential scams and reporting any suspicious activities. Remembering to verify the legitimacy of offers, securing your devices, being cautious with personal information and trusting your instincts are all key to keeping you safer from scams.

Key warning signs to watch for include errors in website URLs, missing contact details and unusual payment requests. Additionally, avoiding unsolicited payment links and insecure payment methods can significantly reduce the risk of becoming a victim of scams.

If you suspect an online shopping website is fraudulent, report it to the ACCC’s Scamwatch.

For potential scams involving social media posts or sellers, notify the social media platform directly.

In addition, you can report any suspicious activity to the Australian Cyber Security Centre at https://cyber.gov.au/report.

The Charles Sturt Australian Graduate School of Policing and Security offers a range of courses in its Financial Crime Studies program. These include the:

• Graduate Certificate in Fraud and Financial Crime
• Graduate Diploma of Fraud and Financial Crime
• Master of Fraud and Financial Crime
• Graduate Certificate in Anti-Money Laundering and Counter-Terrorism Financing
• Graduate Diploma of Anti-Money Laundering and Counter-Terrorism Financing
• Master of Anti-Money Laundering and Counter-Terrorism Financing