“I’ve lost everything”: An Overview of the Systemic Failure Experienced by Victims of Romance Fraud
‘I don’t have anywhere else to go, I’ve lost everything.’ Our client is the victim of an online romance scam. While trying to leave a pre-existing abusive relationship, she had matched with a stranger on a dating app who promised to provide her with the finances and resources to escape her relationship and set up a new life, one free of domestic violence. Ten months later, she finds herself living in a homeless shelter with her bank account emptied and no means to locate the perpetrator to seek redress. Her story is not unique. I encountered a similar story at my local Community Legal Centre earlier this year. Another woman, having fallen victim to a similar scam; homeless, her bank account drained and after being coerced into a sexual relationship with her scammer, a positive HIV diagnosis. With the perpetrator having moved back to ‘somewhere in Africa’, the Australian Federal Police (AFP) informed our client that ‘there is nothing we can do’. Without the funds to pursue civil litigation and a tapestry of jurisdictional issues to navigate, victims often turn to Community Law Centres as the last vestige of hope for obtaining justice.
I. Overview: The issues with obtaining justice
When seeking redress, victims of online romance fraud (ORF) are left to navigate a labyrinth of barriers: international and domestic jurisdictional issues arise both within the courts and the realm of policing, making it almost impossible to locate and hold perpetrators accountable and Victims of Crime (VOC) schemes exclude fraud victims from eligibility. Victims of ORF experience consequences that are analogous with those as victims of a violent crime, yet are systemically neglected in terms of accessing support services for recovery. The result is that victims of ORF are at a higher risk of developing critical mental health issues and attempting suicide.
From the 2023–2024 financial year, Australians lost $2.7 billion to online fraud, with $40.6 million attributed to romance fraud. Until recently, limited effective government protection measures have been implemented to combat the evolving nature of online fraud. However, in November 2024, the Albanese government introduced a Treasury Laws Amendment Bill that, if passed, will provide Australia with a new ‘Scam Prevention Framework’ (SPF), which will see communication and social media companies held liable for any fraudulent activities that are facilitated using their platforms. Although the SPF offers a sliver of hope to victims of romance fraud, it remains inauspiciously silent on matters of compensation.
This systemic failure results in victims being denied opportunities for redress. This essay discusses how jurisdiction operates as a barrier that prevents the conviction of perpetrators; it analyses the effectiveness of the proposed SPF bill and examines the inadequacies of VOC schemes. It showcases the issue of victims requiring to foot the bill for their own recovery. It concludes by highlighting the resounding silence that precedes these systemic issues: There is an obligation founded in equitable principles to restore victims to their original position before experiencing the fraud.
II. International and Domestic Jurisdiction: A Shifting Landscape
A. International Jurisdiction: MLATs and a new Convention Against Cybercrime
The principle of territoriality operates to protect the sovereignty of nations in the realm of international law. It allows that nation to govern the behaviours of its citizens and adjudicate against persons who breach the nation’s laws within its territory, free of interference from other sovereignties. When applied to notions of online fraud, the practical application of the territoriality principles is that no sovereign nation can apply its criminal laws to conduct that occurred in the territory of another without the consent of the latter. Consent is usually only provided when a mutual interest exists between both States. So, while territoriality operates to protect sovereignty, it creates substantial challenges for authorities to respond to online fraud, which operates at an intersection between public and private international law as it is often conducted over multiple jurisdictions where conflicting interests arise. For example, the offender may be located in country A, who targets the victim in country B, who then sends funds to a bank account held in country C. The intangible nature of the internet to operate beyond defined international boundaries presents issues for Australian police forces in investigating and prosecuting online fraud. Within Australia, police forces operate strictly within the boundaries of their respective state jurisdiction; while the AFP is refined to investigating fraud that affects the Commonwealth and not its citizens.
There has been a broader call for policing to evolve beyond ‘traditional, reactive law enforcement’ and shift towards a more globalised approach. A bilateral ‘Mutual Legal Assistance Treaty’ (MLAT) assists in bridging this gap between international jurisdictions by enabling local police forces of respective countries to coordinate a cross-jurisdictional investigation and prosecution of criminal conduct. However, even when an MLAT exists between two jurisdictions, the process for extradition is cumbersome and relies on satisfying the element of ‘dual criminality’, which requires the conduct to qualify as a criminal offence in both jurisdictions. However, Australia holds only thirty-one MLATS with nations scattered across the Americas, Europe, and Asia, none of which are in Africa, where the majority of romance frauds originate. [A note to the reader: It is essential to acknowledge that African nations are more susceptible to high levels of criminal activity due to the economic and populous consequences of the transatlantic slave trade and multiple campaigns of colonialism]. Nonetheless, Australia lacks legislation and resources to empower local police forces to investigate private international fraud crimes. Ergo, even if a scammer is identified, apprehending them for trial in Australia is impossible unless the perpetrator exists within one of thirty-one jurisdictions that Australia holds an MLAT agreement with and the victim has the means to pursue private international civil litigation.
However, in August 2024, the United Nations General Assembly released its Draft United Nations Convention against Cybercrime (the Convention), with the objective of ‘Strengthening international cooperation for combating certain crimes committed by means of information and communications technology systems and for the sharing of evidence in electronic form of serious crimes’. Overall, the draft Convention is designed to compel ratifying States to assist in investigating and prosecuting crimes committed using communications technology, regardless of whether or not an MLAT exists between two State parties. Yet, a founding principle of international law protects States from being held liable under conventions they do not sign. Consequently, while the Convention is scheduled for ratification in early 2026, States are nonetheless protected from forced extraditions and providing coerced assistance if they refuse to become a party to the Convention. However, Article 64 provides that an Economic Integration Organisation (EIO) may ratify the Convention if one of its member States is a party. Kenya has been invited to accede the Convention in 2026. If Kenya agrees to accept this invite, then the African Union (AU), the EIO of which all African nations are members, will be in the prime position to ratify the Convention — effectively creating a pathway for international jurisdiction to operate within the African region.
B. Domestic Jurisdiction: Australia’s New Scam Prevention Framework
In response to the Convention, the Albanese government has introduced the Treasury Laws Amendment Bill 2024: Scams Prevention Framework (SPF) Designed to provide a ‘whole of eco-system approach’ to preventing and responding to scams and online fraud, the Bill will insert the SPF into the Competition and Consumer Act 2010 (Cth), effectively expanding the jurisdiction of online fraud into the realm of consumer law. Central to the framework is the relationship between telecommunication platforms and their consumers. This is demonstrated in its definition of a scam in section 58AG:
(1) A scam is a direct or indirect attempt to engage an SPF consumer of a regulated service that:
(a) involves deception (see subsection (2)); and
(b) would, if successful, cause loss or harm including obtaining personal information of, or a benefit (such as a financial benefit) from, the SPF consumer or the SPF consumer’s associates.
(2) The attempt involves deception if the attempt:
(a) deceptively represents something to be (or to be related to) the regulated service; or
(b) deceptively impersonates a regulated entity in connection with the regulated service; or
(c) is an attempt to deceive the SPF consumer into facilitating an action using the regulated service; or
(d) is an attempt to deceive the SPF consumer that is made using the regulated service
While enforcement of the SPF may lead to reducing online fraud in Australia, the framework remains ambiguous as to what remedies, if any, are available to consumers where a breach of the SPF occurs. Section 58FZ provides that a person who suffers loss or damage by conduct of another person in breach of the SPF ‘may recover the amount of the loss or damage by action against the other person or any person involved in the contravention’. Meanwhile, sections 58FZE and 58FZF limits the orders that can be awarded against a person who has contravened the SPF but expressly excludes awards of damages while also requiring victims to hold a contract with the contravening party to qualify for any remedial orders under the SPF. Last, s58FZE(4) provides that such actions for Orders can only be brought forth by an SPF regulator, not the claimant. The cumulation of these provisions results in the following:
1. Victims of online fraud continue to carry the burden of locating and bringing an action against their perpetrator;
2. The SPF will not facilitate an award for damages against a person who is found to have facilitated in or contributed to the loss of a victim in the course of contravening SPF principles; and
3. A contract must exist between the victim and the contravening person for remedial Orders to be made under the SPF framework.
The express requirement for a contractual relationship between victim and perpetrator is a deliberate limitation resulting in the exclusion of online fraud victims, such as ORF, where a contract will often not exist. This exclusion operates in contrast to the Convention, where Article 34(2) requires compensation and restitution to be accessible to victims of all offences under the Convention, not just those who would fall within the realm of consumer law. This exclusion appears to be an unnecessary limitation that renders the SPF inadequate in meeting the obligations of the Convention, yet it is designed to circumvent the costs that would otherwise be associated with providing compensation and assistance to victims of ORF. In short, while the SPF will provide an essential framework to significantly reduce online fraudulent activity within Australia, it is intended to inject a level of responsibility into the communications sector and not as a mechanism to facilitate victim redress. This leaves victims in the same position as before the introduction of the SPF — with no resources or avenues available to locate their perpetrator and little support in navigating the complexities of jurisdiction in international and domestic civil litigation. When confronted with limited options, victims often turn to VOC schemes to seek redress.
III. The inadequacy of Victims of Crime schemes and barriers to recovery
The object of current VOC schemes in Australia is to assist victims of violent crimes; that is, crimes against a person, and not crimes against property. These schemes operate to recognise the impact of a crime on a victim, and sums are awarded not on the basis of a successful criminal conviction but on the balance of probabilities that a crime occurred and that it harmed the victim. If VOC awards are harm-focused, then it is difficult to argue that these schemes should not apply to victims of online fraud.
However, while most states and territories centre an element of violence, South Australia and Tasmania stand as the only jurisdictions that have broadened eligibility to include victims of ‘offensive’ acts. Within the South Australian framework, an offensive act is defined as ‘conduct on the part of a person that would constitute an offence if it were not for that person’s age or mental impairment’, while Tasmania has a similar provision.Section 17 of the SA Act limits the scope of eligibility to offences that would ‘create a reasonable apprehension of harm to the person’, which could, in theory, apply to instances of ORF that involve a threat of violence or harm, while Tasmania has no such limitations. Further, in SA and WA, the courts are empowered to make reparation orders requiring the offender to compensate the victim for any lost or damaged property arising from any offence. This provides some hope for victims of online fraud in these two jurisdictions whose perpetrators are successfully prosecuted.
However, the likelihood of prosecuting offenders is often hindered by the international and domestic jurisdictional issues discussed earlier in this paper. This is demonstrated by the fact that there are very few cases of online fraud prosecuted in Australia. Despite the limited amount of online fraud cases, it is believed that the number of victims of online fraud, particularly romance fraud, is far greater but resoundingly silent. Cassandra Cross reports that victims carry feelings of deep shame and embarrassment for falling for the deceit, often preventing them from reporting the crime or obtaining support services that would enable them to recover from the crime.
Aside from these personal barriers experienced by victims, historically, fraud has always been considered a victimless crime. Categorising fraud as a ‘victimless’ crime has the effect of excluding victims of online fraud from eligibility for VOC schemes. Consequently, victims of online fraud are left to fund their own recovery. For some, this is impossible, given that they have already sustained financial losses due to the scam. Cross, in her submission to the 2003 Queensland Inquiry into Support for Victims of Crime, has advocated extensively about the challenges faced by victims of fraud and argues that the impact of online fraud is often similar to the effects of a violent crime; but with an increased risk of fraud victims experiencing several interrelated and overlapping consequences, as demonstrated in Figure 1:
It is incontestable that online fraud, particularly romance fraud, is anything but a victimless crime. While the crime may still be considered a property offence, this fails to account for the human impact of the crime and the innately personal nature of targeting the desire for human connection that leads to the successful facilitation of the crime. Cross argues that VOC schemes ought to account for this human element. While I wholly agree with her, I feel there is additional room to argue that if fraud falls within the realm of property crime, then there is a duty grounded in equitable principles of restitution and compensation to restore victims to their previous position before the crime occurred.
IV. The Need for a Scam Redress Scheme: An Equitable Solution
Where the law fails, equity steps in. Equitable principles can operate to bridge the gap where questions of legal ownership may prevent victims of online fraud from obtaining remedial justice. Operating as an ancillary jurisdiction, equity is grounded in notions of fairness and good consciousness aimed at addressing matters where applying the law on its own would amount to an inequitable or unconscionable outcome. In short, it is the ideal area of law to operate alongside criminal and property litigation to restore online fraud victims to their pre-existing equitable position prior to the fraud occurring.
For example, in Black v S Freedman & Co Ltd [1910], it was held that a thief holds stolen property on trust for the rightful owner. This principle could apply to online fraud cases where it can be established that the respondent acquired the property through deception with the intention to permanently deprive the owner of that property. Meanwhile, the doctrine of unjust enrichment would play a role in providing an avenue for restitution to the value of an unjust enrichment where it is found that a defendant has unjustly benefited at the expense of the plaintiff. In addition, the ‘change of position’ defence in restitution claims acknowledges that an innocent party should not be unjustly impoverished if their circumstances arose due to an act of good faith.Last, equitable remedies such as constructive trusts provide an apt avenue for the courts to remedy fraud or unconscionable conduct.
These are just a handful of examples of equitable approaches that could support a framework for a Scam Redress Scheme (SRS) to operate alongside existing VOC schemes. While criminal and property litigation are primarily concerned with legal rights and provide an opportunity for equitable losses to remain unacknowledged, equity provides the principles and doctrines for an SRS to be implemented and provide redress for victims. As mentioned above, courts within SA and WA already recognise these principles and provide avenues for victims of a crime to seek orders for equitable compensation.
An SRS would operate as a combination of criminal and civil action. It would incentivise the government to implement cross-jurisdictional policy to enable law enforcement to investigate and pursue individual online fraud cases beyond Australia’s borders. Such an initiative would be supported by Article 52 of the Convention, which provides that State parties ought to cooperate in returning the proceeds and property of crime for the purpose of compensating victims of online fraud. While this scheme would be costly, it could be contained to those who have suffered a financial loss over a certain threshold or who can demonstrate the level of harm caused by the impact of the fraud, allowing it to operate similarly to existing VOC schemes.
V. Conclusion
Existing frameworks fail to adequately account for the impact of ORF. Developing legislation appears to remain silent on avenues for victim redress. While there is room for reform in VOC schemes and the new SPF framework, ideally, victims require an avenue that would enable them to seek compensation or restitution that adequately acknowledges the harm they’ve experienced as a result of the crime. Such a scheme would be grounded in equitable principles and could operate alongside criminal jurisdiction.
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