$300,000 refunds to scam victims

9 August 2007

More than $300,000 will be returned to victims of 37 North American-based scams after Australian Competition and Consumer Commission court intervention.

"The ACCC, with valuable assistance from the Queensland Police Service and the Competition Bureau Canada, acted to freeze the funds gathered under a mass mail-out to consumers," ACCC Chairman, Mr Graeme Samuel, said today.

"Consumers received letters which were carefully written to create a sense of excitement about a huge and unexpected win or prize, including as a result of a lottery, sweepstake, award or other unclaimed funds.

"Sometimes the scammers explain that the reader was 'specially selected'," Mr Samuel said. "Most ask for the payment of a fee before the win or prize can be paid and others offer (often misdescribed) trinkets associated with a bigger win or prize. Some resemble official or legal documents.

"Once the victim has responded, they are guaranteed of one thing: they will receive more and more letters promoting yet further wins. Scammers often work hard to create a personal relationship with their victims, enabling them to elicit ongoing fees and charges for money that never arrives.

"Some victims become so certain that they are only one more small payment away from getting a fortune that they find it impossible to accept that they have been scammed even when bank or police officers explain the scam.

"This investigation was initiated after an observant credit union employee of Adelaide based Powerstate Credit Union, became concerned that a long time customer was making many small payments to overseas 'lotteries' believing that he had already won a major prize. While many of the victims are older consumers, this is not always the case: scammers are happy to take anyone's money, they don't discriminate.

"The joint action has severely disrupted the operations of 37 scam promoters, but the battle is not yet over.

"These particular promoters used Pacific Network Services Ltd and related companies to move their money around the world. PacNet group cooperated with the investigation. It has paid $316,936 in to a trust fund that will now be handed back to some of the victims. Further it has ended its business relationships with promoters identified in the ACCC's court action.

"If all businesses providing cheque transfer services took appropriate steps to monitor their customers' activities for potential scams and then refused to provide services to the operators, the life blood of the scams would be cut off."

Niche Government Consulting and Assurance, will administer the refunds process. Consumers who can show that they paid money to one of the listed scams between 1 March 2006 and 28 February 2007 can apply to the Refunds Administrator for a refund. Details of how consumers can apply for a refund are attached or can be found on the ACCC's web site.

In the event that claims by victims are less than the available funds, the residual will be paid to a suitable consumer group for promoting consumer scams awareness.

Mr Samuel advised consumers that they can reduce the risk of losing money to scams by asking themselves:

  • if I have never bought a ticket or entered a competition, how could I have won?
  • should I really send all my personal details to a complete stranger?
  • if I have won all this money why do they keep asking me for more?

"If in doubt ask your bank or credit union, call your local State/Territory Office of Fair Trading or the ACCC's Infocentre on 1300 302 502 and remember …if it is too good to be true, it probably is."

Both the ACCC and the Queensland Police Service are members of the Australasian Consumer Fraud Taskforce, a grouping of law enforcement agencies responsible for coordinating enforcement and educational activities between member agencies. Investigations by the ACCC and several overseas counterparts are continuing.

Further information on scams is available from www.scamwatch.gov.au.


Release number: 
MR 209/07
ACCC Infocentre: 

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