Consumer Fraud

the Australian Institute of Criminology has released its 74 page 'Consumer fraud in Australasia: Results of the Australasian Consumer Fraud Taskforce online Australia surveys 2008 and 2009 (Technical and Background Paper no. 43) [PDF] by Carolyn Budd & Jessica Anderson.

The paper comments that -

Those who perpetrate consumer scams use a wide range of deceptive practices and methods of communication. However, all aim to trick unsuspecting consumers into parting with money or information, often to criminals located overseas. Phishing attacks, lottery and prize scams, financial investment scams and advanced fee fraud are just a few of the more common scam varieties that are used in an attempt to gain either money or personal details that will eventually be used for financial gain by offenders. The increased use of electronic forms of communication and the ease of sending mass scam invitations via the Internet has also resulted in an increase in the number of scam requests disseminated globally.

Scam invitations may appear benign to those who receive them and choose not to respond. This form of spam may be seen as an unfortunate consequence of using the Internet, however, scams can cause serious financial and other harms to those who are victimised, as well as to the wider community. Consumer fraud has been estimated to cost Australia almost $1b annually, although the full extent of the losses is unknown as many choose not to report their experiences officially. Although victims of scams can lose as little as $1, some send substantial amounts to criminals, occasionally exceeding many hundreds of thousands of dollars. Those who send such large amounts frequently feel ashamed of what they have done, or apprehensive that they might have acted illegally. Victims may also receive little sympathy for having being victimised and may be blamed for being gullible. These factors act to deter victims from formally reporting the scam to police. When the full circumstances of cases are known, however, the sophistication of the deception makes it clear that victims have been enticed by a serious and concerted campaign of trickery which preys on their weaknesses and vulnerabilities.

The Australasian Consumer Fraud Taskforce (ACFT) includes 20 government regulatory agencies and departments in Australia and New Zealand that work alongside private sector, community and non-government partners to prevent fraud. In order to understand the dynamics of consumer fraud victimisation, the ACFT has conducted a range of fraud prevention and awareness-raising activities since 2006. One key activity of the ACFT is to hold an annual consumer fraud survey to obtain a snapshot of the public’s exposure to consumer scams, to assess their impact, to determine how victims respond and to identify any emerging typologies and issues.

This report presents the results of surveys conducted in conjunction with the 2008 campaign that focused on Seduction and Deception Scams and the 2009 campaign that focused on sending the message — Scams Target You: Protect Yourself, Don’t Be a Victim of Scammers and Fight the Scammers. Don’t Respond. Overall, both surveys found that despite most respondents indicating that they had received a scam invitation over the specified 12 month period, the majority did not respond. Invitations sent by email remained the most common method of receiving an invitation, with lottery scams attracting the highest number of victims in 2008 whereas in 2009, work from home scams were the most common way respondents were scammed.

Although the survey relies on self-reported data, it still provides a useful means of identifying the nature of victimisation and for identifying areas for further research into consumer fraud. The links identified between scam victimisation and factors such as age, income, reporting and jurisdiction could be used to develop more strategic consumer fraud awareness campaigns that focus on the groups more vulnerable to scam victimisation. The relationships between these variables and victimisation could then be explored more fully using representative samples of the population, or in-depth data collection techniques such as interviewing of those who have been defrauded. With a more extensive understanding of who is victimised and why, more effective scam prevention measures can be enacted.

Specifically -

In 2008, 919 people responded to the Consumer Fraud Survey and in 2009, there were 708 respondents. The results were not combined in the analyses conducted in this report, as the surveys used different sampling frames and the questions were altered slightly which made direct comparisons between questions difficult. In both the 2008 and 2009 Consumer Fraud Surveys, the majority of people who received a scam invitation did not respond and the main method of receiving a scam invitation was via email. In 2009, the types of scams affecting respondents differed from previous years, with work from home scams attracting the most victims, compared with previous years where the lottery scam attracted the most victims. This is possibly due to the evolution of scam invitations, but may also be a result of the inclusion of the new scam categories included in the 2009 survey.

Key findings were -

Being the victim of a scam increased the likelihood of reporting a scam to a formal agency.

• Those who sent money were more likely than those who did not send money to report a scam to a formal agency (eg ACCC, police, Consumer Affairs etc) and family and friends (informal reporting).

• Those who sent personal information were more likely than those who did not send personal information to report the scam to a formal agency. Those who sent personal information were more likely than those who did not send personal information to report to the scam in general (ie either family and friends or a formal agency).

• There was a statistically significant relationship between age and reporting, with the 25–34 year age group less likely than expected to report a scam to either a formal agency or family and friends; and the 55–64 year age group more likely than expected to report a scam to either a formal agency or family and friends.

• respondents from Western Australia were less likely to respond positively to a scam; and respondents from Tasmania were more likely to respond positively to a scam.

• being a victim significantly increased a respondent’s perception that all scams are criminal offences; and victims were more likely to consider work from home scams as a crime.

• respondents from New South Wales were more likely to report a scam; and respondents from Western Australia were less likely to report a scam.

Comfortable with dogs

From the Ivan Roots biography, in the ODNB, of Sir Charles Firth (1857-1936) -

Firth's private life, about which he was unforthcoming (his son was never mentioned in his Who's Who entries), was modest and even, considering his wealth, austere. The great working library at 2 Northmoor Road could hardly be counted an extravagance. As regius professor he was a fellow of Oriel, where he took his part in college life, dining often in hall and enjoying conversation with fellow academics. He was a member of the Athenaeum. Somewhat pessimistic, he was not without a sense of humour and, very occasionally, showed a flash of wit. Photographs in later life portray a solid bearded figure, in thick clothing and heavy footwear - he was slightly lame - with a watch-chain resting on an ample stomach; a pet dog looks comfortable with him. Like Richard Cromwell, whose article he wrote for the Dictionary of National Biography, he was a heavy smoker; like him, too, he lived to a great age. He died on 19 February 1936 at the Acland Nursing Home, 25 Banbury Road, Oxford, and was buried on 21 February at Wolvercote. In his will he declared that his widow was to select what she wished to keep from among his books, prints, and other possessions; the remainder was to go to Sheffield University, maintaining the Firth family connection.

Intersex and law reform

The ACT Law Reform Advisory Council has been asked to inquire "into the legal recognition of transgender and intersex members of the ACT community", with detailed advice on whether any changes to the Territory’s current law are needed to ensure protection of human rights and address any gaps in the legal rights of transexual and intersex people.

ACT Attorney-General Simon Corbell commented that

The Council's inquiry will provide an opportunity for the public to comment on the matter. A process for this consultation will be announced soon.

Corbell indicated that the Government has worked closely with Law Reform Advisory Council chair Associate Professor Simon Rice to develop terms of reference for a meaningful examination of the Territory’s laws.

Information about the inquiry, including the terms of reference, will be released in future.

Cybercrimes

Reading 'The True Identity of Australian Identity Theft Offences: A Measured Response or an Unjustified Status Offence' by Alex Steel in 33(2) UNSW Law Journal (2010) 503-531 and 'Operation Titstorm: Hacktivism or Cyber-Terrorism?' by Kieran Hardy in 33(2) UNSW Law Journal (2010) 474-502

Steel comments that -

Much has been written about identity theft, with many making hyperbolic claims that it is the ‘fastest growing crime in the world’ or the ‘crime of the millennium’. In the last few years, Australian jurisdictions have felt the need to enact offences that are described as identity theft or identity crime offences, and are specifically targeted to deal with this phenomenon by prohibiting the possession of personal information with intent to commit further crimes. This poses the question whether such laws are properly framed and amount to a measured response to a new criminal phenomenon, or whether they are instead overly broad and in violation of fundamental legal principles. This article provides an analysis of those new laws.

After defining what is meant by identity theft and identity crime it provides an overview of some of the differences in the nature of digital crime that have led to calls for specific legislation, and some of the problems that face traditional approaches to investigating and preventing fraud. It goes on to examine the specific approaches taken in Australian identity theft law, considering whether the prohibited subject of the offences – identification information – is defined too widely. The core behaviour prohibited – possession – is then examined in detail. The article argues that possession is an inappropriate basis for criminalisation on both theoretical and practical grounds, and illustrates this by a comparison with the concept’s use in insider trading and child pornography offences. Similar issues are raised with the ‘dealing in information’ offence.

It is argued that the inadequacies of these provisions are the outcome of an approach to law making that creates criminal liability too early in the chronology of planning and executing crime. As a result the offences fail to exhibit sufficient external elements to satisfy fundamental requirements of the rule of law, and place too much unfettered discretion in the hands of law enforcement.

Hardy's discussion of hacktivism notes that -

On 10 February 2010, an internet based group of protesters calling themselves ‘Anonymous’ launched a cyber-attack on the Australian Parliament House website. Aptly named ‘Operation Titstorm’, the attack was launched by the group to protest against the Rudd government’s plans to introduce a mandatory internet filter banning pornographic images of animated characters, small breasted women and female ejaculation. It brought down the website for three days by flooding it with network traffic – up to 7.5 million requests per second – and it bombarded parliamentary email addresses with pornographic material (ironically, of the very kind the government intends to ban). It also plastered a selection of this questionable material across the Prime Minister’s homepage.

The message above was posted on an online activism forum in response to the attacks. Evidently, some members of Anonymous remain concerned that their activities may leave the realm of mischievous online protest and enter the largely uncharted waters of ‘cyber-terrorism’. On first glance, the attacks do not fit into what the general public would probably define as a 'terrorist act'. Nonetheless, important questions remain about the extent to which politically motivated cyberattacks will qualify as terrorism under Australian law.

This article analyses the facts of Operation Titstorm under the current definition of a terrorist act in the Criminal Code Act 1995 (Cth) (‘Code’). Although Operation Titstorm has not been, and most likely will not be, prosecuted under the legislation, this analysis is useful because it brings out some of the problems with applying the current anti-terrorism law framework to politically motivated cyber-attacks. Instead of first defining what is or is not an act of cyber-terrorism, this paper works inductively through the requirements of the Australian definition, examining what will qualify as an act of cyberterrorism under Australian law. It then considers whether any adjustments are necessary to conform to an appropriate definition.

Part II tests the facts of Operation Titstorm against the definition of a terrorist act under section 100.1 of the Code. Part III argues that only a low harm requirement is needed to prove that the political protest exception in section 100.1(3) does not apply, and that there are not sufficient safeguards in the current legislation to maintain a distinction between acts of ‘hacktivism’ and ‘cyberterrorism’.

To this end, this paper suggests some ways that the legislation could be improved, in order to reduce the risk that acts of hacktivism will be prosecuted as terrorist acts.

In its current form, Australia’s anti-terrorism legislation sets the threshold too low for prosecuting acts of terrorism against electronic systems. While this broad definition will necessarily include acts deserving of the label of cyber-terrorism, it may also include acts of online political protest that are unworthy of the serious penalties involved. This danger results from the low levels of harm and fault required of an act of terrorism against an electronic system in section 100.1(2)(f), combined with the prosecution’s low burden of proving that the political protest exception in section 100.1(3) does not apply.

The definition of a terrorist act in section 100.1 of the Code should be amended to mitigate this danger by including a serious economic harm requirement and an express fault element in section 100.1(2)(f). This would bring Australian’s anti-terrorism legislation in line with definitions of terrorism at international law and in comparable domestic jurisdictions, and with definitions of cyber-terrorism in computer science. It would reduce the risk of prosecuting undeserving offenders, prevent governments from using the anti-terrorism legislation to silence less serious forms of political protest against electronic systems, and avoid any potential chilling effect on the freedom of online political expression.

The government has recognised the vulnerability of Australia’s electronic infrastructure to cyber-attack – as well it should – but it should also recognise the threat to legitimate online protest that the current definition of a terrorist act creates. We need to ensure that our anti-terrorism legislation cannot be used to silence legitimate online political protest, lest things ‘start getting messy’.

Barrister blogs

A nice crisp post by Stephen Warne regarding Australian barrister blogs.

Recommended reading.

Take the money and run

From 'Personal Finance for Dictators: Where to Stash the Cash' by Graham Bowley in the New York Times of 12 March, regarding the slowdown in regime change in Libya -

The former Philippine first lady, Imelda R. Marcos, and her three children were charged with removing 22 crates of Philippine pesos from the country when they fled to Hawaii in 1986.

In Haiti, President Jean-Claude Duvalier and his wife, Michele, withdrew at least $33 million from the country’s central bank, transferring it to foreign accounts, and may have stored some money and jewelry in a safe-deposit box at a Citibank branch on Madison Avenue in Manhattan, according to court papers filed by the Haitian government after he was forced from power in 1986.

The Panamanian dictator, Gen. Manuel Antonio Noriega, was reported to have stashed $5.8 million in denominations of 10s, 20s, 50s and 100s in a file cabinet behind a desk at his home. United States authorities seized the money during the invasion of Panama in 1989.

In 1997, shortly before the forces of Laurent Kabila took power in Congo, formerly called Zaire, aides close to former President Mobutu Sese Seko smuggled crates of diamonds and more than $40 million in cash out of the country on a jet chartered by the South African government, according to The Sunday Independent, a South African newspaper.

Then, in 2003, in the hours before American bombs began falling on Baghdad, one of President Saddam Hussein’s sons, Qusay Saddam Hussein, was said by officials to carry off nearly $1 billion in cash from the vaults of the country’s Central Bank.

The volume of cash was so great — some $900 million in American $100 bills and as much as $100 million worth of euros — that a team of workers took two hours to load the money on three tractor-trailers.

Remote Healing

A friend has pointed me to 'A critical evaluation of the theory and practice of therapeutic touch' by Dónal O’Mathúna, Steven Pryjmachuk, Wayne Spencer, Michael Stanwick & Stephen Matthiesen in (2002) 3 Nursing Philosophy 163–176 as a follow-up to my recent sarcastic comments about the Saniotis & Henneberg 'non-local mind' article in World Futures.

The authors indicate that -

In this paper, the theory and practice of therapeutic touch (TT) is scrutinized from a number of perspectives. Firstly, the alleged close relationship between TT and Martha Rogers' Science of Unitary Human Beings is evaluated. Secondly, the employment of the language of modern physics in Rogers’ theory and TT is critically examined. The authors then review the research literature on TT’s efficacy, completing their critique by discussing the ethical issues involved in the practice of TT. As each of the perspectives considered reveals some concerns, the paper concludes that TT is a questionable intervention, underpinned by a very weak theoretical, clinical and research base.

I doubt that they would be enthused by the World Futures article. Saniotis & Henneberg appear impressed by claims in Dossey's Reinventing medicine: Beyond mind-body to a new era of healing (HarperCollins, 1999) regarding Grad's research on 'therapeutic touch' as healing wounded mice. (Wave the magic hands in the direction of the mice - waving some dried herbs, gizzard of goat or live reptile is so so yesterday compared to quantum mystic hands - and the little critters get better). Grad's research was challenged in 'Therapeutic touch: is there a scientific basis for the practice?' by Philip Clark and Mary Jo Clark in (1984) 33 Nursing Research (1984) 37–41, which suggested serious methodological problems in the study. They reported that -

An examination of published research literature indicates that empirical support for the practice of therapeutic touch is, at best, weak. The results of well-designed, double-blind studies have been transient, of no significance, or are in need of independent replication. Current practice of therapeutic touch is empirically little more than practice of placebo.

Placebo, not 'soul flight', 'remote healing or other quantum holism mumbo jubo.

O’Mathúna et al comment that -

The concepts of modern physics ... do not give a plausible mechanism for TT and should not be used to support the claims of TT practitioners. Indeed, the effects postulated by the theory of TT appear to be at variance with the known properties of all the forces whose existence is accepted by modern physics. Hence, TT may properly be regarded as inconsistent with background knowledge in that science. This inconsistency goes beyond the mere fact that TT’s mechanism of action is unknown. The theory of TT is an attempt to explain certain putative clinical effects in terms of a causal model involving energetic interactions. Yet, this model is contradicted by a large amount of evidence about the nature and limits of physical forces in the universe, and no alternative with a comparable degree of predictive power or consistency with other well-supported knowledge has been formulated. This has two consequences. First, the theory TT possesses is deprived of explanatory power: one mystery is not explained by an appeal to another mystery. Secondly, the evidence that supports the current picture of physical energy should be regarded as evidence against the theory of TT.

They go on to comment that -

Though the practice of TT has been subject to investigation, most TT studies have been limited. There have been no studies into the nature or properties of the energy field so central to the practice.
Prominent proponents admit that no one has managed to measure the interaction between human energy fields or demonstrate that energy is actually directed during TT (Krieger 1979; Quinn 1989). In two studies (Rosa et al 1998; Glickman & Gracely 1998), TT practitioners failed to detect human energy fields at levels distinguishable from chance results. Significant methodological problems were found in Krieger’s own early research (Schlotfeldt, 1973; Walike et al 1975) and problems have persisted in TT research (Clark & Clark 1984; Meehan 1993; Olson et al 1997). In 1994, a University of Colorado committee of professors from various healthcare professions concluded that:

The scientific rationale for TT is not established and can be questioned in several areas.There is not a sufficient body of data, both in quality and quantity, to establish TT as a unique and efficacious healing modality. (Claman 1994,6)

In considering the use and abuse of literature they state that -

Patient advocacy should be based on reliable and accurate information. This requires accurate reporting of the results of all TT research. The burden lies on promoters of new and controversial therapies to demonstrate, beyond reasonable doubt, that they help. In reviewing controversial therapies, the existence of studies with negative or mixed findings should, at the very least, be mentioned. Unsuccessful replications should also be noted. It could be argued, on the grounds of the quality of specific pieces of research, that omissions are necessary when undertaking a comprehensive review of the literature (particularly when systematic reviews are being undertaken). The reviews cited in the next three paragraphs, however, are biased. Rather than consider a study’s quality, the reviewers’ inclusion criterion appears to be simply whether or not it supports TT. This kind of bias is further explored in O’Mathúna (2000).

By failing to incorporate studies with mixed or negative findings or unsuccessful replications, many TT reviews misrepresent research results. For example, Hughes et al (1996) and Olson et al (1997) cite Heidt (1981b) and Quinn (1984), but fail to mention that Quinn (1989) could not replicate those findings. Numerous articles cite two research studies by Wirth that support TT’s wound healing efficacy (see, for example, Jonasen 1994; Schmidt 1995; Mackey 1995; Mulloney & Wells-Federman 1996; Olson et al 1997). However, Wirth subsequently published three other studies with findings that were not supportive of TT’s effectiveness in wound healing (Wirth, 1995). The above reviews did not mention these failed replications, even though the studies were published well in advance of most of the reviews.

Contradictory results within a study should also be noted. For example, Jonasen (1994) and Hughes et al (1996) cite Fedoruk (1984) as finding statistical significance for anxiety reduction. Olson et al (1992) have been cited similarly, again by Hughes et al. and by Schmidt (1995). Both studies, however, found statistical significance only with behavioural measures, and not with physiological measures. General reviews have also reported the results of some studies inaccurately. Jonasen (1994) and Hughes et al. (1996) claimed that Parkes’s (1985) study supported TT’s anxiety-reducing properties. Parkes (1985,84) actually found that ‘therapeutic touch did not reduce anxiety’. Jonasen similarly cited Quinn (1989) as having beneficial results even though Quinn found no statistically significant reduction in anxiety by TT.

I've exhibited my usual irreverence about the existence or efficaciousness of reincarnation, intercessory prayer, remote healing, precognition, remote viewing, dowsing and other parapsychology that features in World Futures and is recurrently legitimated through reference to 'quantum holism'.

The Skeptics Dictionary more gently dismisses remote healing as quackery, commenting that -

Therapeutic touch (TT) is a type of energy medicine whereby the therapist moves his or her hands over the patient’s "energy field", allegedly directing the flow of chi or prana so the patient can heal. TT is based on the belief that each living thing has a "life energy field" which extends beyond the surface of the body and generates an aura. This energy field can become unbalanced, misaligned, obstructed, or out of tune. Energy healers think they can feel and manipulate this energy field by making movements that resemble massaging the air a few inches above the surface of the patient's body. Energy healers also think that they can transfer some of their own life energy to the patient. These airy manipulations allegedly restore the energy field to a state of balance or harmony, to a proper alignment, or they unblock a clog in the field or transfer life energy from healer to patient. This restoration of integrity to the field is thought to make it possible for the body to heal itself.

TT has no scientific basis but it does have a history. It was created by a nurse and a theosophist. Dolores Krieger, Ph.D., R.N., and a faculty member at New York University's Division of Nursing began TT in the early 1970s. She was convinced that the palms are chakras and can channel healing energy. She is the author of Therapeutic Touch: How to Use Your Hands to Help and to Heal (1979) and several other books on TT. Dora Kunz, president of the Theosophical Society of America, was her mentor and an intuitive healer. TT is practiced primarily by nurses, though TT is apparently being practiced worldwide by all kinds of “alternative” healers and laypersons.

Practitioners admit that there has never been any scientific detection of a human energy field. This, they say, is because of the inadequacies of our present technology. One with a trained sense, however, is allegedly able to detect the human energy field and assess its integrity. Despite the obvious metaphysical basis for this quackery, defenders of TT claim it is scientific because it is based on quantum physics.

Dossey's The Power of Premonitions is unfussed, with its author claiming that -

More than an examination of case studies, The Power of Premonitions reveals the world of science and research that proves the human capacity for knowing the future. Experiments consistently show that human beings are as wired to know what's coming next as we are to see, feel, hear and think. Dossey uses cutting-edge science to prove the value of what had long been considered the provenance of mystic charlatans and to show readers how to cultivate their natural abilities.

Yes, buy the book, polish your ESP and you too can forsee the future.

Given that I'm unconvinced, I responded to the current public consultation by the Australian Health Ministers Advisory Council (AHMAC) regarding alternative medicine, challenging proposals to treat reiki (ie TT) and homeopathy as professions.