August 07, 2023
Robin Powell

Eight scams you need to be on your guard against

Financial scams reported to consumer and finance authorities run into billions of dollars a year worldwide, and Australia is one of the countries where scams are growing the fastest. 

According to a report by the Australian Competition and Consumer Commission, Australians lost more than $3.1 billion to scams in 2022, up from the $2bn lost in 2021. The true figure is probably much higher, as many scams go unreported. 

Investment scams caused the most financial loss, and the two age groups worst affected were 45-54, and 65 and over.

The ACCC report, called Targeting Scams, and how the amount of money lost is on the increase as scammers become increasingly sophisticated. The average sum lost in a scam was $19,654 last year, up 54% from $12,742 in 2021.

Scams range from the faintly ridiculous Nigerian con (“Dearest friend, I am needing your help to distribute an inheritance”) to full-scale identity theft.

The problem is that many people assume they would never fall for a scam. But researchers say it’s dangerous to assume victims have specific traits and they’ve identified five psychological reasons why people — of any age, education or socio-economic background — can be caught out. 

Scammers invest so much time and money in slick sales pitches, flashy websites, convincing emails and glossy brochures because the returns can be very high — for them.

So in the spirit of an ounce of prevention being worth a pound of cure, here are eight types of scams to look out for — if not for yourself, then for family and friends:

Banking scams

Scammers capture your personal account details in a myriad of ways, sometimes by pretending to be your bank. Guard your personal information and keep an eye on transactions via your bank’s app. Call the bank immediately if you spot anything unusual. A suspicious-looking transfer of even just a few dollars could be a scammer testing the link. 

Unexpected money

This is the territory of those Nigerian scams, so-called because they started in that country many years ago. An email will offer access to an inheritance or some other money once you hand over your banking details, or a fee. The rule is never to send money or give banking details or copies of personal documents to anyone you don’t know. 

Surprise winnings

This is a ploy to get your personal information or to extract a fee to arrange a payment that will never arrive from a competition you never entered. A request for payment via money order, wire transfer, international funds transfer, pre-loaded card or an electronic currency like Bitcoin is a warning sign.

Online shopping scams

Scammers may pretend to sell a product just to get your credit card or bank account details. Often the products are well known, but sold at a very attractive price – this can be a sign that it is a scam (ie if the price seems unrealistically good). One scam gave people a second chance to buy an item because the winner had pulled out but asked them to pay outside the auction site’s secure payment facility, and outside the site’s ability to help.

Fake charities

These often spring up after a big natural disaster. Scammers impersonate genuine charities, siphoning public donations into their own accounts. The answer here is to donate independently, using a verified website or calling a number you’ve found yourself.

Job scams

These offer a ‘guaranteed’ way to make big money fast and with little effort. This may involve paying for a starter kit, a business plan or materials like training and software. The only people who benefit from these schemes are the scammers themselves.

Romance scams

Scammers take advantage of people looking for friendship or romance, then play on people’s emotions to obtain money, gifts, or personal details they can use for financial scams. 

Investment scams

If the offer sounds too good to be true, it probably is. Scammers will offer all sorts of fake opportunities, often targeting current trends such as cryptocurrency. Do your due diligence. Run it past a professional. I’ll talk more about these sorts of scams in a separate column.

You’ll find plenty of advice on how to protect yourself from scams on the Scamwatch website. The most important advice, says Scamwatch, is not to give money or personal information to anyone you’re unsure about.

You should avoid clicking on links in suspicious-looking messages, and if you receive a phone call, out of the blue, that doesn’t sound right, hang up. 

Also, contact your bank straight away if you notice unusual activity on your account or if you suspect a scammer has got your money or personal details.

Remember, we’re all vulnerable scams, and that includes you.

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