On the Internet it seems you can’t click anywhere without someone trying to rip you off. Here’s the most common scams you’re likely to hit, and how to avoid them.
The Internet can be a wonderful place to explore, no matter your passions in life. You could make the same observations about stepping outside your front door, and just as in the real world, while there’s a lot of genuinely fantastic things to do and see, it’s wise to be wary and careful.
Not everyone has your best interests at heart, and the online world in some ways makes this easier than the real world. An online scammer doesn’t have to be in your physical presence – or even in the same city or country – to strike.
Online scams are a serious problem in Australia, with the ACCC’s Scamwatch reporting some 239,247 instances costing Australians $568, 654,974 in 2022.
If you think that number is large, bear in mind that the true figure is almost certainly bigger, because that’s just for the scams where people have reported to Scamwatch.
So, what are the big current scams, and how can you avoid them?
Scam 1: Investment scams
The one investment secret the banks don’t want you to know about (which is also a scam)
The number one scam that hits Australians by far are investment scams. In 2022, it’s estimated that fake get-rich-quick schemes cost Australians over $377 million dollars.
To give that some perspective, romance scams, the second-most common reported scam type cost Aussies $40 million. Neither figure is good, but far more people are losing money chasing money than they are chasing love.
They’ve been especially prevalent of late trading in the hype around crypto currencies, with promises of amazing returns for small investment stakes.
All investments involve a level of risk, but investment scammers will try to lure you in with promises of “can’t fail” investments, or amazing returns in very short spans of time, pressuring you to invest “before it’s too late”.
Many investment scammers offer sophisticated looking sites and systems that may appear to show your money growing exponentially and may mimic real world financial and cryptocurrency exchanges to demonstrate how “well” you’re doing. Or in some cases, they may employ a little reverse psychology, showing you making (moderate) losses with an easy way to trade your way out of a deficit by depositing just a little more money.
When you come to cash out you may be hit with excuses as to why that can’t happen, sometimes wrapped in complex financial jargon. Your money is long gone in any case.
How to protect yourself from investment scams:
This is a difficult area, because investment and finance products are complex by their nature, and very few of us have the experience to properly judge the real-world risks involved even in legitimate financial products.
That’s why it’s a good idea before laying money down on any investment to seek independent financial advice.
I’m not a financial advisor, but if I wanted to give financial advice in Australia I’d need to be registered with ASIC to do so.
Likewise, legitimate financial investments have to comply with a range of Australian financial laws and regulations, including having an Australian Financial Services (AFS) licence.
If an investment comes your way, ask a few questions and definitely ask about their AFS licence. The Australian Government’s Moneysmart website has an excellent rundown of the complex steps that are wise to take to avoid falling victim to a financial services scam.
Scam 2: Hello Mum scam
Spoiler: I’m a scammer
The Hello Mum scam isn’t limited to only mothers; wily scammers will also happily send out a “Hello Dad” version if they think it’ll strike gold. Still, the data does suggest that it predominantly targets older Australian women above all else.
The Hello Mum scam is pretty simple; you get a random phone or WhatsApp message, ostensibly from a family member. They’ve lost their phone, or sometimes their wallet and phone, and a kindly stranger has loaned them theirs – hence the unfamiliar number.
Once you reply, they tell you they need money, to get home, to get a quick replacement phone, or so they can use that new phone to access their online banking.
You transfer the money, because of course you want to help your ailing child… and then you never see that money again.
Some particularly nasty variants of the scam may also try to glean further personal information from you or members of your family so that they can expand their scamming net and target others, too.
How to avoid the Hello Mum scam:
You can’t entirely block the ability to get messages on your phone – and let’s face it, you don’t want to in most cases anyway!
This scam works because it sounds plausible enough, and it induces a level of worry and panic, so you respond without thinking it through.
The key here is verification. Your first step should be to call them on the number that you already have for them – not the number or contact in the scam message. A lost or broken phone won’t answer, naturally, but if they do, it’s a scam.
If you still can’t make contact, try other secondary methods, such as calling a partner of theirs, or a work colleague or workplace or similar.
Never, ever send any money or personal details to anyone online without being absolutely rock solid sure that it’s actually going to its intended recipient.
Scam 3: Job recruitment scams
New Year, New Career (that doesn’t exist)
In these constrained economic times, many of us are looking for employment, or a change in employment circumstances.
A new job that promises a solid or possibly even spectacular income in return for simple or very little work, possibly from your own home sounds appealing, right?
The problem here is that while remote work is something that’s become more a part of the landscape in recent years, it’s also rich pickings for scammers who pretend to be recruiters for can’t-miss-jobs that don’t exist at all. Sometimes they’ll misrepresent well-known brands or online shopping sites as well.
Typically, you won’t see these “jobs” on established job seeking sites, with scammers using social media predominantly to prey on the unwary. They’ll ask for a small upfront payment to start up the job… and then there’s no job, and you’re out both the cash and possibly your valuable bank details to boot.
How to avoid job recruitment scams:
These scams often target younger people without significant job experience, but not exclusively. The key here is to think about the job being offered and do a little research.
If they claim they’re from a particular recruitment firm, give them a call and check if the offer is indeed legitimate. If they’ve contacted you via social media, it almost certainly isn’t. It’s wise still to be wary of these kinds of offers posted on real job sites – scammers can lurk there, and if you do spot those kinds of ads, report them to the site. You’re not just protecting yourself that way, but also others.
If they offer you a lucrative job sans interview or any kind of query around your personal experience, odds are it’s a scam. Any reputable employer anywhere is going to want to know at least bit about you.
Scam 4: Romance scams
I really, truly, deeply love (ripping you off)
In Australia, romance scams are the second most prevalent type of scam, with That desire for romantic connection is only human nature, and it’s certainly true that you can find exactly the right person for you online, because real people do this all the time.
The problem is that real scammers also use romance scams, AKA “Catfishing” to build rapport with their victims, sometimes over several months or even years. They’ll rapidly profess their undying love for you and try to build up trust with you before asking for financial help due to an unforeseen emergency, or intimate details or pictures.
In the former case they’re just after cold hard cash; in the latter the end game may be either identity theft or blackmail, depending on the content you send them.
How to avoid romance scams:
Romance scams are tricky because they play on our emotions in the most awful way. The exact same things that a genuine paramour may say are the same things – to an extent – that a romance scammer may say.
However, there are precautions you can take to separate the Romeos from the Rome-nos.
If they provide an image, do a reverse image search on Google or other search engines for that photo.
Many scammers will grab photos of strangers to mask their identity and appear more attractive. If the same photo is attached to a different name than the one your supposedly “beloved” says, they’re up to something shady.
Never send money to a potential paramour. Just don’t – you may not only be doing yourself out of dough, but in certain transfer arrangements you could open yourself up to money laundering charges. Want to go to prison for your not-at-all-true-love? Nope.
Webcams are ridiculously affordable these days, so break off that date with your online beau if they persistently claim their webcam is broken. It’s a sign they don’t want you to see the real them.
Also avoid using an unknown video calling service that they suggest, as they may also be trying to get you to install malware on your device.