Protecting Your Finances:
5 Tips to help you avoid money scams
Frustratingly, scams are becoming increasingly sophisticated, and protecting your finances is more important than ever. In 2023, more than 600,000 Australians fell victim to scams, resulting in losses exceeding a staggering $2.74 billion. Clearly scams are on the rise and even the most financially astute individuals can be targeted by these schemes, which often present as legitimate investment opportunities or urgent fraud alerts.
To help you safeguard your hard-earned money, here are 5 ‘red flags’ to help you recognise and avoiding scammers.
1. Investment and Crypto Scams: Beware of Unrealistic Promises
Investment scams are on the rise, with Australians losing $1.3 billion to these schemes in 2023 alone. These scams often start with a tempting offer – high returns with low risk, only needing to start with a small amount. Investors might see what appears to be instant gains, prompting them to add more and more. However, when they attempt to withdraw their funds, they discover the platform was fraudulent, often several months later. Crypto scams are in this category, and they are very hard to trace.
Protect yourself: Before committing to any investment, verify the company’s credentials with the Australian Securities and Investments Commission (ASIC) on moneysmart.gov.au. Avoid engaging with ads and cold calls.
2. Money Recovery Scams: Don’t Be Scammed Twice
This type of scam is really disturbing. After falling victim to an investment scam, individuals are often targeted again by money recovery scams as their details can be sold on the dark web. Scammers pose as recovery agents, offering to retrieve lost funds for a fee. This can lead to further financial loss and emotional distress, especially if the scammer resorts to threatening behaviour or blackmail.
Protect yourself: If you’ve been scammed, be extra cautious about anyone offering to help recover your funds. Verify the legitimacy of recovery services independently and avoid engaging with anyone who pressures you to act quickly.
3. Payment Redirection Scams: Always Verify Before You Pay
Payment redirection scams occur when a scammer gains access to business email accounts and alters invoices or payment instructions. This can result in significant financial loss, particularly in situations like property settlements or urgent payments. Even emails that appear to be from a trusted source can be fraudulent.
Protect yourself: Always verify payment instructions by contacting the individual or company directly, using contact details you have on file—not those provided in the suspicious email. This simple step can prevent significant financial loss.
4. Remote Access Scams: Protect Your Devices and Information
Scammers often pose as representatives from reputable organisations, such as telecos or even the Australian Federal Police, to gain remote access to your devices. They may claim there’s a security issue or system error that needs to be resolved, but once they have access, they can steal your personal and financial information.
Protect yourself: Never allow remote access to your devices unless you have personally initiated the contact and verified the legitimacy of the request. Keep your login details and authentication codes private – sharing them is akin to handing over the keys to your house.
5. Bank Impersonation Scams: Be Cautious of Unsolicited Requests
In bank impersonation scams, fraudsters pretend to be bank representatives and use fear tactics to convince you to reset your online banking passwords or authorise transactions. These scams are particularly dangerous because they play on your trust in your bank’s security protocols.
Protect yourself: Remember that legitimate banks will never ask you to transfer funds to protect against fraud or request remote access to your accounts. Always verify the authenticity of such requests by contacting your bank directly through a known and trusted channel, such as if you bank offers an authentication app.
A final note…
Stay Vigilant and Informed!
Scammers are becoming increasingly adept at mimicking legitimate institutions and creating believable stories. However, by staying informed and vigilant, you can protect yourself and your finances from these threats. Always double-check any unexpected requests, verify information through trusted sources, and don’t worry about seeming overly cautious – protecting your money is the priority.
