On the trail of the web scammers

On the trail of the web scammers, by David Adams - 6th April 2004
(Credit: The Sydney Morning Herald)

"Be your own boss!" "Eliminate your credit card debt!" "Use our proven strategies to make money online!"

They can reach into your email inbox or you can come across them while surfing the web. They are on bulletin boards, in chat rooms and - they are scammers, fraudsters and charlatans, constantly trawling for fresh victims on the information superhighway.

But between them and you stands a group of dedicated individuals - modern-day marshals, if you will - whose aim is to prevent these outlaws who operate in the Wild West of the internet from getting to your hard-earned cash.

Among those standing between you and them are Keith Inman and the six members of the Australian Securities and Investments Commission's electronic enforcement unit. Charged with providing expertise to ASIC investigators, the team - which includes a senior lawyer, a technician and experienced investigators - was formed in 2000.

"(It was) clear that internet channels were open to abuse, particularly for the offer of illegal financial services products and through scams," says Inman, the director of electronic enforcement at ASIC. "We needed to make sure that we had the . . . skills and knowledge to be able to investigate these occurrences and to be able to trace the individuals or groups involved and bring our enforcement outcome to bear, whether that be prosecution or some sort of action in the civil courts to case their conduct."

Based in central Sydney, the members of the unit fly around the country to assist in investigations.

Many investigations are sparked by complaints from the public, but the team is also involved in more aggressive actions against scammers. These include highly publicised campaigns, during which teams of up to 20 people - including investigators brought from around the country - use a thesaurus of key words to identify websites or bulletin boards that may contravene legislation administered by ASIC.

The Australian Competition and Consumer Commission conducts similar campaigns. Louise Sylvan, the ACCC's deputy chairwoman, says the latest campaign, in February, was aimed at shutting down suspect sites and apprehending those behind them. "The sites are extremely fast - they disappear and so on - so we're trying to be incredibly quick in terms of grabbing them."

Sylvan believes that co-ordinating the sweep with other agencies around the world, sending a "tidal wave of enforcements" into the internet, sends a strong message to scammers. "Scammers and shonky traders need to know that the consumer protection agencies are in that space. I think it's a really crucial message."

ASIC has also been involved in the development of scam search software known as Scamalert. The software has been developed under the banner of the $2.2 million Scamseek project carried out by a team of more than 15 people at the Sydney-based Capital Markets Co-operative Research Centre, working in partnership with the University of Sydney's School of Information Technologies and Macquarie University's Department of Linguistics and ASIC.

Using a web spider to trawl the net 24 hours a day, the software feeds information back to a document classifier, which analyses webpages to sort those sites that feature scams from those that don't.

Jon Patrick, a professor at the University of Sydney and the project leader, says that rather than using key words to identify suspect webpages, Scamalert "understands the meaning of words and thereby forms a richer and more subtle analysis of the document".

Trials have shown Scamalert can identify a scam three out of four times.

Tips for protecting yourself against internet scams

Always get a prospectus or product disclosure statement.
Deal only with licensed advisory businesses (ASIC offers a free safety check of businesses licensed to sell financial products or give advice).
Always get your statements from investment funds, companies you hold shares in or your superannuation fund.
To protect against self-employment scams, check with the appropriate authorities - such as a chamber of commerce, the ACCC or relevant consumer protection authorities - to see whether an offer of work is genuine and ask for all details in writing.
Suspect a scam if you're asked for your account details or a password in an email.
Only go to official financial institution websites by typing in the URL yourself - never use an email hyperlink to do so.
If it sounds too good to be true, it probably is. Clues for spotting scams include looking for those which offer bigger and faster returns, claim to involve less risk and effort or offer something special.





University of Sydney

Macquarie University


When will spam be banned, by Greg Tingle


Jayne Hitchcock, President of WHOA and author of Netcrimes

Vena McGrath, author of Secrets, Lies & Chat

Lee Tien, Electronic Frontiers Foundation