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Sunday, April 28, 2024

I lost $2.5m of my super to scammers - MAN MADE $85,000 CASH IN ATO SCAM, CAIRNS CROWN COURT HEARD

 

I lost $2.5m of my super to scammers

Five victims outline how their funds were taken by sophisticated impersonation fraudsters and why they feel abandoned by their banks.


Former finance academic Kim Sawyer had $2.5 million in super savings stolen between last July and early October in a series of sophisticated scams, with his banks refusing to refund him due to a legal loophole.
He is one of many customers with the nation’s major banks who claim their attempts to get explanations or compensation for millions of dollars lost to impersonation scams are being ignored or compensated with derisory “good will payments”.
Kim Sawyer is working on getting the banks to admit their legal liability. Eamon Gallagher
Superannuation, home deposits and money from transaction and offset accounts have allegedly been stolen in sophisticated scams with technologies that use the bank’s legitimate phone number and texts on the same thread as genuine messages.
The victims claim the banks are using a legal loophole to avoid financial liability for the thefts, responsibility for the money’s security or power to control the losses.
Stephanie Tonkin, the chief executive officer of Consumer Action Law Centre, is leading the calls for banks to share more of the pain from scams. 
More than 60 victims who have lost money from HSBC accounts in the past 12 months totalling more than $6 million have formed an action group to demand compensation and explanations about how the scams happened.
Many claim the bank has attempted to buy them off with “good will” payments of around $200 for tens of thousands of dollars in losses each.
Stephanie Tonkin, chief executive of the Consumer Action Law Centre, says banks should be given incentives to improve their systems by having to pay compensation, similar to a reparations system introduced in the UK this year.
“That would support consumers who have lost money through no fault of their own,” Tonkin says. “It would also drive banks to improve and fortify their systems. It is an artificial and unfair distinction.”
Tonkin says liability should be apportioned between the banks, owners of online platforms and telcos used by scammers.
Under current law, banks will compensate victims of fraud – such as where an unauthorised third party uses a credit card – but not scams where the victim has provided information to the scammer, such as inadvertently providing a pass code.
Federal Financial Services Minister Stephen Jones says scam losses almost halved in the last quarter of 2023 because of the establishment of the National Anti-Scam Centre, a partnership between government, law enforcement and private sector.
Anna Bligh, chief executive of the Australian Banking Association, has dismissed the idea of creating of a UK-style compensation scheme, which she says has become a “real honeypot”.
AFR
Anna Bligh, chief executive of the Australian Banking Association, says a compensation scheme would be a “honey pot for scammers”. Bloomberg
“Unfortunately, when one scam disappears, another will appear. So it’s critical that banks, government, telcos, social media platforms as well as consumers continue to work together to stay one step ahead of scammers,” she says.
Scammers are targeting individuals – often highly educated professionals with a sophisticated understanding of their accounts and transactions – with large amounts of money.
The HSBC action group claims the bank has shrugged off repeated calls for a thorough investigation into the losses. The group claims the bank’s “weak systems and protocols” make customers an easy target for professional scammers.
A spokesperson for the group says the bank must have been aware of the frauds because of their frequency and similarity. These typically involved a telephone call from someone purporting to be a bank employee.
Victims had repeatedly called the bank reporting the thefts and seeking information. “But it did not implement any significant changes to its processes, such as fund transfers arriving in the recipient’s bank account within seconds,” the spokesperson says.
Commenting on the complaints, a HSBC spokesperson says: “We again strongly remind our clients and the broader public to never give out bank codes or passwords.
“HSBC will never ask you to provide your PINs, passwords or verification codes on a phone call, in response to a text message or email.
“HSBC will also never call you asking you to transfer money to another account.”
But the action group claims HSBC’s weak systems and protocols are “low-hanging fruit” for professional scammers.
“HSBC will claim it provided notifications and alerts, but it is clear that this is not good enough to protect customers from professional scammers,” the HSBC action group’s spokesperson says.
In its latest report, the Australian Competition and Consumer Commission says that year-on-year losses from scams have fallen by 13 per cent while reports of scams increased 18.5 per cent.
Investment scams, which were the largest as measured by loss, fell from $1.5 billion to $1.3 billion.
The ACCC highlights that NAB’s newly introduced payment prompts in digital banking to help identify potential scams have prevented more than $50 million in illegal payments over the past eight months.
Below are recent cases where scam victims are still waiting for an explanation and/or compensation from their banks.
Super savings gone: Kim Sawyer lost $2.5 million in super savings over three months last year when he thought he was buying fixed-income products from St George Bank.
But he was dealing with scammers using the name St George Capital, who provided online and hard copy materials that convinced him he was dealing with legitimate bank representatives.
AFR
Kim Sawyer, who lost $2.5m from his super in a banking scam, is calling for compensation.  Eamon Gallagher
The former associate professor in finance says: “The 28 transfers that were made were not the transfers that were authorised, which means they were sent to different names. The scammer took over the payment systems.”
The money was transferred from accounts with AMP, Citibank and Macquarie Bank to Westpac, ANZ, the CBA and Bendigo Bank. This was because St George Capital said it was arranging the transfer from the source banks to term-deposit accounts with the four receiving banks.
Macquarie Bank was the first bank to notify him the money had been rerouted – but it took three months, by which time it was too late.
“We contacted all the banks as to where the funds had been transferred, yet have not yet received any answers – not even account names,” Sawyer says.
“The scammers were so confident that even though AMP notified Westpac of the scam, Westpac still released the money to the scammers because the scammers lodged a complaint with the Australian Financial Complaints Authority, an independent disputes resolution scheme, and threatened legal action against Westpac.”
A spokesperson for St George Bank says its brand was used to promote a fake prospectus.
“After being made aware of the scam, we posted warnings on our website and on social media, including images of the scam materials, and had the domain name removed,” he said.
The bank says it also works with the Australian Financial Crimes Exchange, the ABA’s Scam-Safe Accord and authorities and regulators to identify fraud.
Savings disappear: Julie Khoo, who has a post-graduate degree in finance, says last October she had a telephone conversation for an hour with a “well-spoken man” who claimed he was with the HSBC fraud team.
Khoo, who is based in Melbourne, says he spent the first half hour convincing her of his position.
She was persuaded to hand over her pass code in the belief she was preventing a fraudulent transaction from her account. Instead, $50,000 – which was her daily transfer limit – was stolen.
“I expect the bank to protect me,” Khoo says. “But it didn’t and has now washed its hands of me.”
AFR
Julie Khoo, who lost $50,000, warns of sophisticated scammers.  Eamon Gallagher
Accounts emptied: Jenny Ng, a finance analyst, and Jian Lim, an engineer, lost $138,000 from their joint HSBC accounts last October.
A scammer claiming to be a member of the HSBC fraud team transferred the $50,000 limit out of each of their accounts and the balance from a mortgage offset account.
“The scanner knew HSBC’s finance system inside out,” says Lim. The couple, also based in Melbourne, says the bank has made no attempt to explain what happened or pay compensation.
Jenny says it made a “humiliating” offer to pay $2000 as a “good will” gesture.
Account-block threat: Vicky Schaefer, who moved from Canada to Western Australia around 17 months ago, says she called the bank on January 11 this year at around 11am after not being able to use her debit card because around $1500 had been fraudulently withdrawn.
About three hours later, an impersonator called with personal banking details claiming he would unblock the account. She agreed to provide her pass code. Four withdrawals were immediately made, totalling $48,500.
“I couldn’t understand how he knew so much about my accounts,” says Schaefer, who lives outside Perth. “It has been the worst experience of my life.” Twenty calls and eight emails requesting assistance from the bank remain unanswered, she adds.
Mortgage raid: Simon Elvins, a public servant, lost his home deposit of $275,000 in a scam last May and, to secure the mortgage, had to pay late fees and lenders mortgage insurance totalling about $31,000.
Elvins says he unwittingly sent the cash to a scammer using a “mule” account that replicated the conveyancing company’s letterhead and other documentation.
AFR
Simon Elvins says the scam will eventually cost him $1 million in extra fees and payments.  AFR
Elvins believes the scammer hacked the conveyancer’s emails to create the fraudulent invoice. NAB has rejected any liability for the theft
His higher refinancing costs are expected to blow out losses to more than $1 million over his 30-year mortgage.
Alan Macher, an NAB executive, says : “Unfortunately, once a customer has authorised a transaction and money has left their account, it can often be very difficult to recover due to the speed at which criminals have stolen.”
Macher says many criminals transfer money via cryptocurrency or overseas, “making recovery extremely difficult and usually unsuccessful”.

10 ways to avoid being scammed

  • A bank will not ask for funds to be urgently transferred, so ignore these requests.
  • Ignore SMS messages from a bank with a telephone number. Call the bank directly on an independently sourced number.
  • Ignore requests from someone claiming to be from your bank asking you to transfer money to “keep it safe”. Scam experts warn that fraudsters are using smoothing computer-generated voices to lull victims.
  • Ask anyone claiming to be a bank representative for a reference number and call the bank on an independently sourced number.
  • Never provide online banking passwords, one-time security codes, pins or tokens to anyone over the phone.
  • Contact your bank or financial institution if you think you are a scam target.
  • Threats in a message, such as “your bank account has been locked” or “a payment has been made from your account” are signs of a bank impersonation scam.
  • Never click on suspicious links. They could trick you into divulging personal information or be a way to download viruses, malware or spyware on to devices.
  • Scammers can make invoices appear legitimate by copying logos and ABNs. Or they can send emails that appear to be from the business you are dealing with, but with changed banking details.
  • Be wary of offers that appear too good to be true, St George Bank says. Call an organisation on a trusted number to confirm if an offer or payment details are legitimate before transferring any money.

MAN MADE $85,000 CASH IN ATO SCAM, CAIRNS CROWN COURT HEARD 


On April 28, 2024By Essiy Park
A man pocketed $85,000 in cash in a “very simple but effective” Australian Taxation Office scam and there was no chance the money would ever be repaid, Cairns District Court heard on Friday.
Paul Jason Valle, 50, pleaded guilty to six counts of obtaining a financial advantage by deception and one count of attempting to obtain a financial advantage by deception in the Cairns District Court on Friday. Bizarrely, an anonymous person filled in the returns after Valle provided his MyGov ID and reactivated a defunct ABN, but Valle benefited, with the tribunal ruling that the money was spent on “bills, drugs and meals out with his girlfriend “. Judge Ian Dearden warned from the start that information provided about Valle’s health problems would not prevent a stint behind bars.
“It’s just blatant fraud, there’s not even the faintest air of reality,” Judge Dearden said.
“To put it very clearly, it’s candy money until the Commonwealth catches up, it’s been paid and subsequently spent, and the prospect of getting anything back is pretty slim.”
Commonwealth’s Attorney Christopher Moore told the court that Valle was receiving GST refunds to which he was not entitled. There was no commercial entity.
“As soon as these funds were in his account, he made significant withdrawals,” Mr Moore said.
The scam started in November 2021, with six BASs lodged, but by April 2022, when a claim for $17,990 was unsuccessfully lodged, the ATO “smelled a rat”. Vale pocketed about $85,000 — the government took $18,429 owed in unpaid child support from the funds. “He did not pay any money to the person who assisted him,” Mr Moore said.
Defense attorney Tim Grau presented medical evidence about the recurrence of a tumor in Valle’s bladder, his depression and other problems such as carpal tunnel syndrome. He submitted character references and outlined a solid work history, although at the time of the fraud Valle was receiving a government benefit and living rough. He sent a letter of apology from Valle that he said showed remorse, embarrassment and shame.
“They could not have orchestrated this without the assistance of a third party,” Mr. Grau said.
“He was approached by an old friend, as your honor said, it was candy money.” Judge Dearden said it was a simple but effective fraud for six months.
“Prison is the only appropriate punishment, it was a blatant and substantial fraud,” he said.
“There is absolutely no prospect of repair.”
Valle received a principal sentence of two and a half years, with release after six months on $500 reparations and a three-year good behavior bond.
bronwyn.farr@news.com.au


Nathan Hynes has avoided jail after pocketing more than $100K in GST scam with help from unknown accomplice

A Mildura man who pocketed more than $100K in taxpayer money from a fraudulent GST scheme has claimed he paid a third party to lodge the illicit paperwork for him.


A Mildura man who defrauded the government out of more than $100,000 using a well known scam has claimed he used a third party to commit the crime.
Nathan Hynes, who pleaded guilty to recklessly spending proceeds of crime, told Mildura Magistrates’ Court he paid “ a couple of grand for every ten grand I got,” but stopped short of naming just who the third party was. 
The scam was uncovered as part of Operation Protego, an initiative by the Australian Taxation Office specifically aimed at cracking down on such fraudulent schemes. 
The court heard Hynes had applied for an ABN under the guise of vineyard labour work in December of 2019.
He then registered for GST in May of 2022, before the mystery conduit lodged no less than nine fraudulent Business Activity Statements (BAS), the proceeds of which landed in a bank account belonging to Hynes.
The nine fraudulent BAS statements totalled a return of $108,761, all of which Hynes had spent before Monday’s hearing.
The court heard the accused was in receipt of jobseeker at the time he received the money.
Hynes was charged with recklessly spending proceeds of crime, but wasn’t charged with lodging the fraudulent BAS, a point that left Magistrate Patrick Southey flabbergasted.
“How is this not like all of the other cases?” Mr Southey remarked at one point. 
Hynes’ lawyer informed the court his client “didn’t have the capacity to pay the money back”. 
Hynes was handed a three-month suspended sentence and an 18-month good behaviour bond.