After major bust, Australia dubbed a 'testing ground' for phone security scams

Australia has been described as a "testing ground" for the now infamous IT security support scams following a raid in which US authorities seized $US188,000 ($183,936) in assets held by dozens of outed fraudsters.

Australian Communications and Media Authority (ACMA) chief executive Chris Chapman said half of the 10,000 complaints it received in 2010 related to phone scams.

"That was just the tip of the iceberg," Chapman said during a press conference at the US Federal Trade Commission (FTC) early this morning. "Australia is a testing ground for scams."

His comments followed a crackdown against scammers that targeted nations including Australia, the US and Canada.

The FTC together with foreign government agencies froze US$188,000 in assets, seized domain names and blocked phone numbers linked to six tech support scams, 14 companies and 17 individuals operating in India, with a handful of operators located in the US.

The companies posed as legitimate security outfits including Microsoft, McAfee, and Symantec, and purchased Google keyword advertising against the company names in efforts to trap victims.

Each attempted to fleece between $50 and $450 from victims to have false security threats removed.

FTC Chairman Jon Leibowitz acknowledged the effectiveness of the scams despite that some of the con acts resembled "a bad Bollywood movie".

He and Chapman conceded there was little hope for financial reimbursement to victims and said prevention of scams required consumer education and coordination between international law enforcement agencies. 

Chapman told SC the precise cost of IT security scams to the Australian economy was unknown.

Figures released by the Australian Competition and Consumer Commission put the combined cost of a variety of fraud scams to the 12 months to March 2011 at $85 million dollars, up a whopping 35 per cent over the previous year.

Leibowitz said scam calls cost the US tens of millions of dollars and generated many thousands of complaints.

The Canadian Radio-television and Telecommunications Commission (CRTC) took legal action against two of the six India-based software companies, Pecon Software and Avaneesh Software, for making unsolicited scam calls in voilation of the country's Do Not Call register.

The companies were fined US$495,000 ($484,342) and US$12,000 ($11,741) respectively and were served with violation notices.

ACMA has released a consumer information campaign to warn of the dangers of information security scams dubbed "Spot the scammers and stop the scammers". The FTC and CRTC have also released new consumer awareness documents.

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