Money - 19 Mar, 2019

How to spot and beat a scam

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With scammers consistently changing their methods to capitalise on current trends or events, it pays to stay up to date with the most common scams. Here’s what to watch out for.

While most of us can spot an obvious swindle, the whopping $107 million scammed out of Australians in 2018 suggests that scammers are slicker than we’d like to believe. There were 177,516 reports filed last year alone, and 9.9% of these reports came with a financial loss.


Data provided by Scamwatch, the information service run by the Australian Competition and Consumer Commission (ACCC), shows investment and dating and romance scams were the most profitable, swindling Aussies out of almost $40 million and $25 million respectively, while online shopping, hacking, and unexpected prizes and lottery scams raked in almost $10 million in total.

Unsurprisingly, scams carried out over the phone bought in the most money, at just over $30 million, with email trailing slightly behind at $25 million. Internet and social networking platforms were used to extract around $15 million apiece, while text message-based scams only pulled in slightly more than mail scams, both hovering around the $2 million mark.

What are the most common scams and how can you avoid them?

Knowledge is power when it comes to avoiding scams, meaning it’s wise to stay up to date with the various scams doing the rounds (Scamwatch posts current information as it comes to their attention on each of the pages linked below). Here are the key types of scams you may encounter:

Buying and selling scams

Use of online stores or retailers like Gumtree or eBay to extract money for goods or services you never receive.

most common scams

Charity scams

Scammers may set up fake websites or call you pretending to be from a charity to get your money or credit card details.

Dating and romance scams

The person you meet on an online dating site asks you to send them money for bogus but highly emotional reasons.

Job and employment scams

Employment opportunities that promise huge incomes with little work, usually by asking you to transfer money for someone else or recruit new victims.

Scammers ‘guarantee’ you a job or certain level of income and trick you into paying an up-front fee for unnecessary work materials.

Investment, and betting and sports investment scams

Scammers will promote ‘foolproof’ systems and software that can ‘guarantee’ a profit on business opportunities or sporting events.

Lotteries and fake prizes

You may receive a letter or email saying you have won a lottery or prize and you need to send money or your personal details to claim your ‘winnings’.

Mobile phone scams

These include misleading offers for ‘free’ or cheap ringtones that end up being a subscription or premium rate service. You may also receive a text message or information about an SMS competition that will charge money if you reply to them.

If you fall victim, it’s recommended you file a complaint with the Telecommunications Industry Ombudsman.

Money transfer requests

Commonly known as the “Nigerian Prince” scenario, these scams involve promises of huge rewards if you help someone transfer money by paying fees or giving them your bank account details. You may be also be told you have an inheritance or other windfall awaiting your personal and financial details.

Small business scams (false billing)

Small business scams include bills for advertising or directory listings that you never ordered, dodgy office supply offers and false claims of government requirements needing you to send money.

Social media scams

Hackers copy a person’s profile and friend you, they then send a message saying they need you to urgently send money to help them out. 

Tax scams

These may involve sending tax bills to be paid to an account not associated with the ATO, or conversely, may involve emails, SMS messages and phone calls offering you an unexpected refund or grant.

Scamwatch advises the Australian Taxation Office (ATO) will never contact you asking for personal or credit card details.

General tips for avoiding scams

Scammers often capitalise on current events, trends and times of the year – for example, tax scams are common around tax time, and once deadlines pass for filing a return or paying a debt bill.

These scams are often more successful at tricking people because there are legitimate requests going around at the same time, and they can closely match the real deal.

Your best bet to avoid being scammed is to:

  • Always pay bills or make charitable donations by making contact with the agency in question yourself – never pay over the phone when they’ve called you, or by clicking through a “Pay Now” link on an email. 
  • If it sounds too good to be true, assume it is. If you’ve genuinely won a prize or have an inheritance due to you, you will not be required to provide banking or personal details over the phone or email.
  • Ignore hard luck stories, from an online romance or stranger posing as a friend over text or social media. If you’re worried it is genuinely a friend, make contact with their family or talk to them on a number you are familiar with.

While you’re unlikely to retrieve your money if you find yourself successfully scammed, Scamwatch has a handy list of steps and contacts to lock down your accounts and protect your identity from further scams.

Words by Melanie Hearse.

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