A terrible reality many Australians are facing as sophisticated scams target our vulnerabilities and become more prevalent during the ongoing health and financial crisis we’re experiencing.
You may think that these scams only affect our older Australians, when in fact they’re painfully swindling most age groups at a similar rate. Those aged 55 to 64 experienced the highest losses totalling roughly $30 million, while 25 to 34 year old’s reported the second-highest cases.
So, it’s important for all Aussies to remain vigilant of recent Australian scams popping up and to know how to spot them and protect yourself.
As we continue to advance our technological capabilities, it’s also opening us up to varying types of scams to fall prey to each day.
It was found in the Government’s latest targeting scams report that the most popular scams Australians are facing are those categorised as investment scams (totalling a combined loss of $126 million in the last year) followed by dating and romance scams ($83 million) and then false billing ($10.1 million).
And, this is just the tip of the iceberg with hacking, online shopping scams, remote access scams, identify theft, threats to life/arrest, classified scams and inheritance scams making the rounds.
Being the most popular type of scam out there, investment scams target your personal wealth and trick you into investing in fake schemes and companies. You see the warning signs with such phrases used as ‘get rich quick’, ‘risk-free investment’ and ‘become a millionaire’.
Sadly, those who fall victim to investment scams have a higher chance of losing their money with 42 per cent of people unable to retrieve any funds back, averaging a loss of $12,350 per person. And, these losses only seem to be going up, with cases jumping 59 per cent from 2018 to 2019.
This is where a scammer (operating from overseas) calls you posing as a stockbroker or portfolio manager and says they have low-risk, high return investment opportunities you can make money off. This is usually in the form of investing in overseas companies; shares, mortgage or real estate schemes and foreign currency trading.
A scammer contacts you by email or posts online encouraging you to buy shares in a company they predict is about to jump in value and you need to act quickly. In reality, they’ve got shares and are trying to boost the stock price so they can sell it off at a higher rate, exiting before it falls and leaving you at a loss or with worthless stock.
Often promoted by motivational speakers or self-made millionaires promising advice that will make you rich. These events can be free or even charge an attendance fee and are designed to get you following their high-risk strategies. In the end, you’re hit with hidden fees and undisclosed charges, while also encouraging you into buying expensive investment reports and books.
No matter who you talk to these days, you’re likely to hear a story of a person they know whose been scammed or they themselves have received at least a suspicious email, call, text, letter or social media message.
Speaking with Financial Planner, Serenette Crombie from Invest Blue, she has seen firsthand the impacts online scams and investments scams are having on everyday Australians – both young and old.
“We’ve definitely noticed a recent spike in scams affecting our local people here in Toowoomba, Queensland, and it’s terribly sad when you see the emotional and financial stress it causes,” she said.
“One case I’ve come across that highlights the importance of being vigilant and to keep informing our older friends and relatives, was when a lady in her 70s was scammed into transferring tens of thousands of dollars out of her bank account,
“She feared hackers had accessed her account, when a scammer, who was posed as a bank representative, said this was happening and convinced her to urgently transfer the funds out of her account into another,
“She was so terrified of losing her savings that she compiled and didn’t realise what was really going on until it was too late,
“And, it’s not only our older people who are being targeted, I’ve seen younger Aussies experiencing credit card and identify theft as well.” She added.
Unfortunately, in times when we’re most vulnerable scammers are most active and this has been the case during the recent COVID-19 pandemic, as illustrated above.
Millions of dollars have already been lost and thousands of new scams have surfaced with the most common scams being:
They call impersonating a financial service provider and offer early withdrawal of super funds, benefits on superannuation, and other fake services to get your personal information. The information is then used to steal funds from superannuation accounts.
During the pandemic, the number of phishing scams has shot up the most. Scammers are pretending to be government agencies, banks, insurance companies, travel agents, and telecom companies and using excuses related to COVID-19 to extract personal information. They may also send links to gain remote access to computers, seek payments for fake services, or fish for bank account details.
Specifically targeting the helplessness of small business owners in the ongoing difficult times. Scammers compromise business emails of entities and pretend to be suppliers or customers. The businesses are then asked to divert their regular account payments to new accounts that belong to the scammers.
Here’s a useful article on how to watch out for tax scams.
Below are some simple tips to protect yourself from investments scams and other common online scams:
1. Never respond to unsolicited calls and messages. Avoid sharing any personal details including bank account information, credit/debit card numbers and other financials even if they claim to be from a government agency or other reputable organisation
2. Seek the professional advice of an accredited and reputable financial adviser before investing your money. You can confirm this by checking they have an Australian Financial Services License or Australian Credit License from the Australian Securities and Investment Commission
3. Check they’re not on the ‘do not deal with’ list provided by the Australian Government’s MoneySmart website
4. Secure strong passwords and privacy settings for your social media and email accounts as well as your computer and mobile devices. Ensure these devices also have the latest virus protection software installed
5. Never click any hyperlinks or attachments provided in emails, text or social media messages. Also, hang up immediately if you receive a suspicious call
6. Review sellers before making online purchases. Do not fall for attempts for upfront money transfers and international fund transfers
7. Stay up to date on different types of scams occurring. If you know how people are getting scammed, you’re less likely to fall in the trap yourself
If you think you have been targeted by a scam, immediately report it to ASIC or contact your local police. Also stop communicating, sending any money and be cautious of follow up scams or offers claiming to help recover your money.
Don’t fall victim to scammers promising easy and quick returns. Engage with a licensed financial adviser who can provide quality investment advice to safeguard your future.
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