Fraud affairs of the heart and more

Fraud affairs of the heart

Three elderly men in Australia lost almost half a million dollars in an alleged romance scam that police believe may have involved dozens more victims.

Responding to a personal ad for a “country lady at heart looking for her soulmate,” a man from Toowoomba paid $42,000 and a man from Far North Queensland paid $343,500 after the woman claimed she needed money to break her work contract. Suspicious friends and lack of communication from the woman once she was paid compelled the men to report the incidents.

Police investigated three Gold Coast homes in July and found $79,200 in cash stuffed inside pillows in one of the homes. Further evidence revealed a third victim who was scammed out of more than $111,000. The police arrested two women from Benowa who were each charged with five counts of fraud and one man from Mermaid Beach who allegedly helped coordinate communication in the scam. (See “Police believe dozens of Australian victims could be linked to alleged romance scam,” by Nicholas McElroy, ABC News, Sept. 6, 2023 and “Police warn of romance scams after two men report alleged fraud,” by Anna Houlahan, Inner East Review, Sept. 6, 2023.)

China cracks down on cross-border cybercrime

China and Myanmar joined forces in September to detain 269 fraud suspects in one of the biggest collaborative crackdowns on cybercrime between the two countries.

Law enforcement officials from both countries brought down 11 cyberscam bases in Myanmar that targeted Chinese nationals with fake romance and employment schemes that garnered about 120 million yuan ($16.5 million) for the alleged fraudsters. The arrests are part of a broader enforcement effort on cybercrime by China, which has also been working with authorities in Thailand and Laos. In this recent joint operation, China’s Ministry of Public Security announced that 186 Chinese nationals had been repatriated back to China. (See “Police in China and Myanmar detain 269 in cyber scam crackdown,” by Zhao Ziwen, South China Morning Post, Sept. 5, 2023.)

Friendly fraud sinks retailers’ profits

A risk management study in September revealed that seemingly harmless “friendly fraud,” such as using multiple email accounts to take advantage of promotional deals and buying items with the intention to return most of them, costs major retail companies over $100 billion annually. Riskified, a fraud management company, polled 300 global companies that are losing money to fraudsters exploiting lax return policies. While those looser policies and generous promo codes have helped expand retailers’ ecommerce business, they have come at a significant price. According to the poll, two-thirds of retailers (67%) said they can only recoup less than half the value of a returned item. “We would have been better off financially if the customer had broken into our warehouse and stolen the item versus the expense of returning it,” Riskified quoted one merchant saying.

Retailers may become more selective about free return policies and monitoring customer histories. Many respondents said that AI, automation and improved data intelligence would be essential in addressing this kind of abuse. (See “Fraud may be more costly than theft for retailers,” by Tony Owusu, Longview News-Journal, Sept. 14, 2023 and “Policy Abuse and Its Impact on Merchants, Global Benchmarks 2023,” Riskified.)