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3 common financial scams and how to avoid them

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3 common financial scams and how to avoid them
Person wearing a hacker mask sitting at a computer

Criminals are constantly on the lookout for ways to get their hands on your hard-earned cash  – whether that’s posing as a government official, falsely claiming to be from a charity or even pretending to sell you a sought-after dog breed.

As they say, forewarned is forearmed. So what are some of the most common financial scams you need to keep an eye out for?

And, unfortunately, scams like these have soared during the pandemic. Australians lost more than $851 million to scams in 2020 alone, according to the Australian Competition and Consumer Commission (ACCC). Even worse, that figure is likely to be the tip of the iceberg, with many more scams likely going unreported.

Investment scams

We all know that if a deal sounds too good to be true, it probably is. Unfortunately, scammers can be very convincing – and often use professional-looking brochures and websites to help them tout whatever snake oil they’re selling. Investment scams caused the most financial loss in 2020, with combined losses of $328 million, according to the ACCC.

Romance scams

Scams come in all shapes and sizes. But one of the most heartless types is when a scammer creates a fake profile on a legitimate dating website. They pretend to be your ideal partner to gain your trust, in a process that can last months or even years. Once you’re head over heels, they ask you for some cash to help with illness, injury or a family crisis. Needless to say, these emergencies are all make-believe.

Phishing scams

Phishing is when scammers impersonate legitimate businesses or organisations to try to trick you into giving them your personal and banking information. Usually, these attempts take the form of fake emails, text messages or phone calls that are designed to appear genuine. However, on closer inspection, you might find the messages contain spelling mistakes, use poor grammar or direct you to a website that has a different URL to that of the organisation they’re impersonating.

How to avoid being scammed

Here are a few golden rules that can reduce the risk of being scammed:

  • Choose your passwords carefully, using a mix of upper- and lower-case letters, numbers and symbols
  • Keep your mobile devices and computers secure by regularly updating antivirus software and operating systems
  • Be careful when shopping online and only shop on websites you trust
  • Be wary of offers that sound too good to be true, especially any so-called  ‘high-return’ opportunities
  • Think carefully before clicking on a link in an email or SMS
  • Be suspicious of any phone calls from people claiming to be from your bank or another service provider
  • Keep your personal details secure and don’t share internet banking passwords, PINs or verification codes with anyone

What should you do if you think you’ve been targeted?

If you think you’ve been scammed, contact your bank immediately. They have fraud teams that can help you limit the damage and protect yourself from further loss.

You should also report it to the ACCC’s Report a Scam webpage – as this can help warn others.

Finally, if you think one of your passwords has been compromised, change it immediately.

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