With new threats looming around every corner, it’s easy to forget that old threats still exist. There are plenty of financial scams happening around the world. Australia alone has already recorded record levels of money lost to financial scams in 2020. Nearly 100,000 Australians have reported scams since the beginning of the year, with those scams causing almost $89 million of damage.
The actual number of scams has gone down a little compared to January 1 to July 31, but the total money lost has grown by 93% since the same time period for 2017. The most worrying part of the increase in losses is that scams are becoming more sophisticated, enabling scammers to walk away with more money from their targets than before. Australians aren’t getting scammed with the forex scam or other financial scams as often as they were, but they are losing more money as a whole.
April proved to be the most successful month for scammers in Australia. There were a total of 17,701 cases of fraud, resulting in $16.4 million in damages. July was the month that saw the most number of individual scam complaints, however. The month saw 18,579 reported scams in July, which caused $12.3 million in damages to victims.
Scammers like to target older people with a forex scam or other scam. Most of the victims were people aged 65 and over. People in this demographic accounted for 14.4% of total scam cases, and 23.4% of the money lost to fraud.
Scams to Watch For
- Investment Scams
Investment scams are the most lucrative scams in Australia. Criminals use a range of “get rich quick” schemes to trick people into investing in. 2020 has seen nearly 4,000 investment scams reported so far, which is relatively low compared to other scams. This is a sign of how much money can be made with a good forex scam, as investment fraud accounted for over a third of all money lost to scams. Australians were cheated out of over $34 million thanks to these scammers.
One of the most important things you can do to protect yourself against an investment scam is to ask a lot of questions. Fraudsters are counting on you not to ask questions or do research. The more research you put into the “opportunity” yourself, the better your chance to protect yourself against a scam. The EDGAR filing system is your best friend here. Search for financial statements on EDGAR and research investments to ensure you are putting your money in a genuine product that stands to make money.
It’s also good practice to avoid unsolicited offers. Don’t invest in someone you don’t know and don’t fall for unsolicited sales pitches. Avoid recommendations for “off-shore” or foreign investments as well. It’s harder to track your money and find out what happened with international transfers. The person could take your money and run, and you’d have no idea where they went.
- Romance Scams
Romance scams remain popular with con artists. These scams involve people creating fake profiles on social media and dating websites to target people looking for love. There have been 2,373 recorded cases of romance fraud so far this year, with just over a third (34%) of those resulting in financial damages.
Romance scams accounted for $23.7 million, over $10 million more than the same period for last year.
The easiest way to protect against romance fraud is to never send gifts and money to romantic partners you’ve not met in person. Always cut off communication if you suspect that you might be getting scammed. Talk to a person you trust about your relationship and listen to people if they are suspicious of your new beau.
Another little trick you can do for potential romance scammers is a reverse image search for their profile picture. This will tell you if the picture has been used elsewhere, such as social media profiles. Check the details of any profile you find against the details given by the person to spot scammers.
- Phishing Scams
Phishing scams aren’t the most lucrative choice, but they are the most frequent. Phishing is when a criminal pretends to be a legitimate organization. They contact potential targets over phone or email to get sensitive information out of them, such as usernames and credit card details.
There have been nearly 20,000 phishing scams this year, increasing over 6,000 for the same period last year. This means that almost a fifth of scams in Australia is phishing scams. These scams account for over $780k in financial damages.
There are several things you can do to protect yourself against phishing scams. One of the most important is to install antivirus/antimalware software on your computer and phone. Use multi-factor authentication with your accounts when you can. The mild inconvenience is worth the extra security. It’s also a good idea to keep regular backups of your data so that you don’t have to worry about data loss.
Avoid opening and interacting with unsolicited emails and messages on your phone. If you are even slightly suspicious, go with your gut. Watch for red flags, such as grammatical mistakes and incorrect email addresses.
Scams represent something of an “ultimate equalizer” for crime in that they can happen to anyone at any time. Protect yourself against scams by protecting your devices and watching for red flags. Scams come in all shapes and sizes. Don’t think that something isn’t a scam, or you couldn’t be a target because of individual circumstances. Investment scams, romance scams, and phishing scams are the most common scams, but they aren’t the only ones.
If you, or someone you know, become the victim of a scam, you should contact the Australian Competition and Consumer Commission. The organisation can point you in the right direction and warn other people about the potential for scams.