Four prevalent online scams in Australia (and how to steer clear of them)
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Four Common Online Scams in Australia (and How to Avoid Them)
It seems like every click on the Internet could lead to someone trying to scam you. Here are the most frequent scams you might encounter and ways to steer clear of them.
The Internet is a fantastic place to explore, regardless of your interests. Much like stepping outside your door, while there are many great things to see and do, it's wise to remain cautious and vigilant.
Not everyone has your best interests at heart, and the online environment can make it easier for scammers to operate without being physically present or even in the same city or country.
Online scams are a significant issue in Australia, with ACCC’s Scamwatch reporting approximately 239,247 cases costing Australians $568,654,974 in 2022.
If you think that number is large, remember it's likely even higher, as this only accounts for scams reported to Scamwatch.
Four prevalent online scams in Australia (and how to steer clear of them)
So, what are the major scams currently, and how can you avoid them?
Scam 1: Investment Scams
The investment secret banks don’t want you to know (which is also a scam)
Investment scams are the most common scams affecting Australians. In 2022, fake get-rich-quick schemes cost Australians over $377 million.
To put that in perspective, romance scams, the second most reported scam type, cost Australians $40 million. Although neither figure is good, more people lose money chasing wealth than love.
These scams have recently capitalized on the hype around cryptocurrencies, promising incredible returns for small investments.
All investments carry some risk, but scammers lure you with promises of “fail-proof” investments or quick, high returns, pressuring you to invest “before it’s too late.”
Investment scammers often present sophisticated sites and systems that appear to show your money growing rapidly and may mimic real financial and cryptocurrency exchanges. Sometimes, they use reverse psychology, showing moderate losses with a simple way to recover by depositing a bit more money.
When you try to cash out, you may encounter excuses wrapped in complex financial jargon. Regardless, your money is gone.
How to Protect Yourself from Investment Scams:
Investment and finance products are inherently complex, and most of us lack the expertise to assess the real-world risks of legitimate financial products.
Therefore, it’s advisable to seek independent financial advice before investing any money.
I'm not a financial advisor, but to give financial advice in Australia, I’d need to be registered with ASIC.
Similarly, legitimate financial investments must comply with various Australian financial laws and regulations, including having an Australian Financial Services (AFS) licence.
If you encounter an investment opportunity, ask questions, particularly about their AFS licence. The Australian Government’s Moneysmart website offers a detailed guide on steps to avoid falling victim to financial scams.
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Scam 2: Hello Mum Scam
Spoiler: I’m a scammer
The Hello Mum scam isn’t exclusive to mothers; savvy scammers also send a “Hello Dad” version if they think it’ll pay off. However, data suggests it primarily targets older Australian women.
The Hello Mum scam is straightforward; you receive a random phone or WhatsApp message, supposedly from a family member. They’ve lost their phone, or sometimes their wallet and phone, and a kind stranger has lent them theirs – hence the unfamiliar number.
Once you reply, they claim they need money to get home, buy a quick replacement phone, or access their online banking.
You transfer the money, wanting to help your child… and then you never see that money again.
Some particularly malicious variants may also try to gather further personal information from you or your family to expand their scam network.
How to Avoid the Hello Mum Scam:
You can’t completely block messages on your phone – and you wouldn’t want to in most cases!
This scam works because it seems plausible and induces worry and panic, prompting a hasty response.
The key is verification. First, call them on the number you already have – not the number in the scam message. A lost or broken phone won’t answer, but if they do, it’s a scam.
If you still can’t reach them, try other methods, like contacting their partner, a colleague, or workplace.
Never send money or personal details online without being absolutely sure it’s going to the intended recipient.
Scam 3: Job Recruitment Scams
New Year, New Career (that doesn’t exist)
In tough economic times, many are seeking employment or a change in job circumstances.
A new job promising a solid or spectacular income for simple or minimal work, possibly from home, sounds appealing, right?
The problem is that while remote work has become more common, it’s also ripe for scammers posing as recruiters for non-existent jobs. Sometimes they misrepresent well-known brands or online shopping sites.
These “jobs” typically don’t appear on established job sites, with scammers using social media to prey on the unwary. They ask for a small upfront payment to start the job… and then there’s no job, and you lose both cash and potentially valuable bank details.
How to Avoid Job Recruitment Scams:
These scams often target younger, inexperienced job seekers, but not exclusively. The key is to evaluate the job offer and conduct some research.
If they claim to be from a specific recruitment firm, call them to verify the offer. If contacted via social media, it’s likely a scam. Be cautious of such offers on legitimate job sites – scammers can lurk there, too. Report suspicious ads to the site to protect yourself and others.
If they offer a lucrative job without an interview or inquiries about your experience, it’s probably a scam. Any reputable employer will want to know at least a bit about you.
Scam 4: Romance Scams
I really, truly, deeply love (ripping you off)
In Australia, romance scams are the second most common scam type. The desire for romantic connection is natural, and it’s possible to find the right person online, as real people do all the time.
However, scammers use romance scams, or “Catfishing,” to build rapport with victims, sometimes over months or even years. They quickly profess love and build trust before asking for financial help due to an emergency, or for intimate details or pictures.
In the former case, they’re after money; in the latter, they may aim for identity theft or blackmail, depending on what you send them.
How to Avoid Romance Scams:
Romance scams are tricky because they exploit emotions. The same things a genuine partner might say could also be said by a scammer.
However, there are steps to distinguish genuine connections from scams.
If they provide a photo, do a reverse image search on Google or other search engines.
Many scammers use photos of strangers to hide their identity and appear more attractive. If the photo is linked to a different name than the one your “beloved” uses, they’re likely up to something shady.
Never send money to a potential partner. You risk losing money, and certain transfers could expose you to money laundering charges. You don’t want to face legal trouble for a false romance.
Webcams are affordable, so if your online partner claims theirs is broken, it’s a sign they don’t want you to see their real identity.
Avoid using unknown video calling services they suggest, as they might try to install malware on your device.
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