Spotting financial scams – how to safeguard your hard-earned money
Scammers are growing more clever. Every day in Australia, thousands of people receive fraudulent texts, emails, or calls designed to deceive them out of their hard-earned money. In fact, according to the ACCC's Scamwatch, Australians lost over $3 billion to scams in 2022 alone.
Financial scams can threaten anyone. They are sophisticated, often seem legitimate, and exploit trust, fear, or a sense of urgency to deceive. However, with a few practical steps, you can lower your risk and safeguard your finances. Here's how to spot scams before they spot you.
1. Recognise the common types of scams
Understanding the main types of scams is your first line of defence - they can come in many forms, but most fall into these categories:
- Phishing scams in the form of fake emails or texts pretending to be from your bank, the ATO, or even Australia Post. They often include urgent language such as "Your account will be locked!" and a link to click
- Investment scams often promise guaranteed, high returns on shares, cryptocurrency, or property. If it sounds too good to be true, it usually is
- Romance scams involve fraudsters building online relationships, gaining trust, and then requesting money for emergencies or travel
- Remote access scams involve someone calling, claiming to be from Telstra, Microsoft, or the NBN, and asking you to install software that grants them access to your computer
- Shopping scams with fake online stores offering significant discounts, but the goods never arrive
2. Look for red flags
Scammers rely on tricks to create pressure or confusion. If something feels off, trust your gut - it probably is! Watch out for these flags:
- Urgent requests to "act now"
- Requests for unusual payment methods (e.g. gift cards, cryptocurrency, bank transfers)
- Poor spelling and grammar in emails or texts
- Suspicious links (hover over links to see the real URL)
- Calls from "government" or "bank staff" asking for personal details or money
3. Protect your personal information
Think of your personal information like cash: once it's stolen, it's gone. Be cautious about what you share and where you share it. Don't share bank details, passwords, or ID documents via email or text. Set strong, unique passwords for online accounts with two-factor authentication (2FA) enabled whenever possible. You should also be wary of sharing too much on social media, as scammers can use small details (like your birthday or pet's name) to guess passwords or security questions.
4. Be smart with phone calls and emails
Scammers are masters of impersonation. They might call pretending to be your bank, the ATO, or even the police. Remember, banks and government agencies will never ask for your PIN, passwords, or to transfer money to a "safe account." If you're unsure, hang up and call back using a verified number, such as the one listed on the official website, rather than the one provided by the caller. It is also vital to never click on links in suspicious texts or emails. Instead, type the address directly into your browser.
5. Double-check before investing
Investment scams are among the fastest-growing types in Australia, especially in the cryptocurrency sector. Before handing over money, verify if the company is licensed on ASIC's financial register, and steer clear of pressure tactics, such as "This deal expires today." Be wary of social media ads or influencers promoting "risk-free" investments, and consult a licensed financial adviser if you're uncertain.
6. Keep your devices secure
Your digital security is just as crucial as locking your front door, so ensure your antivirus software is always up to date and install regular updates for your phone and computer. Use secure Wi-Fi networks, avoid logging into banking apps on public Wi-Fi, and back up your data in case of ransomware or malware attacks.
7. Know what to do if you are scammed
Even the most cautious people can fall victim to a scam. If it happens to you, act quickly:
- Contact your bank immediately to stop or reverse unauthorised transactions
- Report the fraud to Scamwatch and the Australian Cyber Security Centre
- If you've lost or given out your identity documents, contact IDCARE (idcare.org) for free support
- Change your passwords and strengthen your security settings
- Acting quickly can minimise the damage and help protect others by alerting authorities
8. Stay informed
Scams are constantly evolving. One of the best protections is staying up-to-date. Sign up for Scamwatch alerts, follow your bank's security updates, and discuss scams with family and friends to help prevent the spread of scams circulating. By sharing knowledge, you not only help protect yourself but also your entire community.
The bottom line
Scammers don't discriminate, and anyone can be a target. However, by recognising the warning signs, protecting your information, and staying alert, you can significantly reduce the risk of financial loss. Think of scam awareness as financial hygiene - just like brushing your teeth or locking your door; it's something you do every day to stay safe.
Remember, if it sounds too good to be true, it probably is. Stay cautious, stay informed, and protect what you've worked hard for. But if a scam has hit you and you find yourself short of funds while sorting things out, don't panic - we're here to help. While you work with your bank and the authorities to resolve the situation, our cash loans of up to $5,000 could offer a short-term safety net to help manage your bills and expenses. It's essential to act quickly, protect yourself from further losses, and give yourself time to recover while you get back on track.