- Posted on 8 Apr 2025
- 5-minute read
“Hi Mum,” the text message reads. “My phone doesn’t work so I’m using a spare. I’m stressed out because of a bill due tomorrow. Please text me on this new number.”
This is start of the ‘Hi Mum’ scam, which first emerged in Australia in 2022. Recipients who reply to the text will be prompted to pay a bill or transfer money to help the sender – purportedly their child – who has run into sudden financial trouble.
The truth, of course, is that the text isn’t from their child, and the funds they send will quickly disappear, often into an offshore account. ‘Hi Mum’ is just one of countless financial scams that cost Australians an estimated $2 billion in 2024.
It’s also the sort of dubious activity that fascinates Dr Kenny Phua, a researcher at the UTS Business School. Dr Phua works at the intersection of business, technology and social impact, and his research offers ground-breaking insights to digital and financial scams: how they work, the environments that enable them, and how scammers identify and connect with their victims.
Out of the basement, into the world
What Dr Phua has learnt busts some popular myths about scams and their perpetrators — for example, that scammers are lone, basement-dwelling wolves trying to make a quick buck. Instead, he says, many scams are run like real businesses.
“They work in proper buildings; they have HR departments and finance departments like real corporations. They’re highly organised,” he says.
And, while scam victims are often depicted in the media as helpless older people who are flummoxed by technology, those most likely to be tripped up by a scam are actually in their 30s and 40s. That’s because running a scam is actually pretty costly, Dr Phua explains, which means that scammers tend to focus on picking high-value targets. Joan the pensioner is often a much less lucrative option than someone who’s on an upward career trajectory.
“The 30s and 40s are the prime earning years for most people, and that’s also when they’re most engaged in the economy. They have home loans, they have jobs, they’re making lots of online purchases, and so their data are flying everywhere,” he says.
The dark side of e-commerce
Accessible data is one of the essential ingredients for successful financial scams. In a recent study, Dr Phua and his collaborators demonstrated that the closure of physical bank branches exposed local populations to increased instances of identity theft.
The issue isn’t so much digital banking — banks are “in the data business; they have a very strong incentive to protect client data,” Dr Phua says — but a lack of physical infrastructure that forces people online and into the environment where scams take place. In the digital realm, all our actions, from buying things to paying bills to downloading apps, generates a wealth of data that can be terrifyingly easy for scammers to access.
“Most companies have a lot of incentive to collect your data because they want to use it. However, they may not have as strong an incentive to protect that data, which is why you see a lot of data breaches,” Dr Phua says.
This isn’t a problem consumers can solve on their own. Digitalisation is unavoidable; it’s not like you can unplug yourself from the online world. The government, businesses and law enforcement need to think a bit more carefully about how to keep consumers safe.
Not a flaw but a design feature
In another study, Dr Phua and his team looked at the business of initial coin offerings — that is, crypto — to try and understand how scams are designed. If you’ve ever found yourself rolling your eyes at a misspelled email from a Nigerian prince, desperate for your help to get his millions out of the country, Dr Phua has news for you: those errors are deliberate.
“When you get one of those emails or phishing phone calls or SMSs, they’re just so ridiculous — maybe they’re typos, they’re grammar mistakes, and I think for the longest time, people just thought oh, this is scammers being dumb and careless,” he says.
“But our research found that it’s a rational choice and an optimal targeting strategy.”
Here’s how it works: in addition to identifying high-value victims, scammers also want to minimise the time they invest in the scam. Getting into a conversation with someone who’s already suspicious about your motive means the scam takes longer and is likely to end without a transaction.
By contrast, finding someone who isn’t put off by the unbelievable unlikelihood that a stranger wants to gift them a few million dollars, even if that stranger can’t spell, is the holy grail.
Business for a better world
There are just some of the findings that have emerged from Dr Phua’s broad body of work — but already, they offer exciting potential for real-world impact. Understanding how and why scammers do what they do, and who they’re likely to target, is an increasingly critical challenge for the governments, financial institutions and other businesses tasked with protecting people’s money.
“Our work can serve as hard evidence that scams are causing real harm to people,” he says.
“Once we understand the factors that contribute to the prevalence of these scams, then we can start to think about policies that can keep consumers safe.”
That Dr Phua’s work is focused on people rather than corporate profits is a creative take on traditional business research. But at the UTS Business School, which has a high-profile agenda of socially committed research and teaching, it’s right at home.
Like many of his UTS peers, Dr Phua is interested in how to deliver business outcomes for the greater good. That starts with research that shares the wealth — and reduces the risks — for everyone.
“Financial fraud is such an important socioeconomic issue that has received very little attention in research,” he says.
“Unfortunately, there are always going to be people who are vulnerable to scams. If we want to ensure that the gains of digitisation are inclusive and broadly shared, then we need to pay more attention to protecting these vulnerable groups.”
Written by Dr Kenny Phua
Senior Lecturer in the Finance Discipline Group and researcher with the Digital Finance CRC.