People fall victim to scams in several different ways, and a scam isn’t just about money—it can be about collecting someone’s identification and using it for unlawful purposes.
The Australian Securities and Investments Commission (ASIC), as one of the agencies responsible for the National Indigenous Consumer Strategy, urges Indigenous consumers to be wary of scams and has recently launched an awareness campaign. View the media release here.
For Indigenous consumers, there were 2,767 scam reports to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch in 2019, which represents a 14 per cent increase from the previous year. In total for the community, there was $2.1 million in financial losses in 2019, with the average scam costing a consumer $4,858.
Types of scams
Investing scams were by far the largest for the Indigenous community, with total losses in excess of $1.1 million. Scams around superannuation have always been present.
Community feedback is suggesting that scammers are getting people to start a self-managed super fund (SMSF) with the promise of having control over your own investments, but the scammer usually tricks people into giving them access to their funds.
A SMSF is complex, with plenty of legal obligations that people need to meet. Many finance professionals believe that you need at least $200,000 in your super account to make it worthwhile.
Dating and romance, followed by online shopping, were the next two categories that produced the biggest loss. The combined losses for these two areas were over $500,000.
How are people getting scammed?
Scams over the phone are still the largest, with 756 reports and $632,000 reported losses from this one method. Internet and social media scams came in second with a total loss for the community of almost $523,000, followed by email scams with losses reported to be $155,000.
Who is getting scammed?
Indigenous people between the ages of 25 and 44 made the most reports and reported the biggest losses. The total amount of money lost for this age group was $966,000 or 46 per cent of all reported scam losses.
However, there are concerns that this is happening across all age groups but isn’t getting reported as much as those who are 25 to 44-years-old.
In terms of gender, men lost most to investing and selling scams, while women lost most to investing and dating and romance scams.
What happens if you think you’ve been scammed?
The best thing to do is report it. The people that are operating scams are very good at what they do and it can happen to anyone at any time. Don’t be too ashamed if you’ve been scammed. There are a few options for reporting it.
You can report the scam to ASIC here or report to the ACCC’s Scamwatch here.
Depending on the type of scam, there are a few different things that you may want to do. If the scammer has any of your bank details including debit and credit cards, you’ll need to contact your bank. Let them know what has happened and they can guide you on the best way forward.
The same goes for government scams where you will need to contact Centrelink or the tax office.
If it’s an online scam, it would be worth changing your password to important websites. Remember not to use the same password for multiple sites, and make them hard for people to guess.
How to spot a scam
If it’s too good to be true, it often is. Don’t give out personal information over the phone without doing some research. If someone is trying to sell you an investment over the phone, ask for their name and the company’s name so you can do some research. If they pressure you into buying before you can do a search, it’s probably best hanging up the phone.
Email scammers are getting better every year. They manage to replicate an email that looks the same as a company would send to you. The biggest giveaway for email scams is the email address. Click on the email address at the top and if it has unusual words or numbers, chances are it’s a scam.
Never click on the links in an email. Instead, open a new web browser and log on to the site to see if the company has sent you message via your account.
Scammers are becoming more sophisticated with how they get money from people, so it’s a good idea to keep on top of things.
Below are two websites for government agencies that will help you to stay scam aware:
By Phil Usher
Phil Usher is a Wiradjuri man and the CEO of First Nations Foundation, a national Indigenous not-for-profit with a vision of achieving financial prosperity for Indigenous Australians. www.firstnationsfoundation.org.au