5 useful tips to help you avoid financial scams

Category: Australia & News

Like many of us, it’s very likely that you’ve been the target of financial scammers.

Barely a week goes by without the media or consumer groups reporting details of how unsuspecting people have been taken in by fraudsters.

The rise in online communication, and the consequent reliance on it, means that scammers have been given new avenues through which to try and steal your money.

As well as the traditional cold-call, they now make use of text messages, emails, and bogus websites, and are becoming increasingly sophisticated in their methods.

Read on to learn more about how scammers work, what to look out for, and for five handy tips to follow – and to share with your family and friends.

How scammers work

The tactics scammers use are becoming increasingly efficient, given the massive increase in online communication. The worldwide cost of cybercrime is now measured in the trillions as everyone, from individuals to multinational businesses, are targeted.

From the point of view of individuals, scammers will try to take advantage of vulnerable people – such as the elderly – or those in situations where they may be most vulnerable to being scammed.

The latter category could include you answering your phone late in the evening when you’re relaxed, or very late at night when you’re tired or half-awake.

For example, you may get a call at one of those times purporting to be from your bank alerting you that your account has been targeted and you need to transfer your money to a “safe” account. The screen on your phone may even show a familiar number.

The person will sound reassuring, and even suggest you call him or her back so you’re happy it’s not a scam. In reality, if you use the same phone, the call will automatically go through to them.

If you don’t think you’ll fall for such a scam, think again. Research from Santander confirms that half of us would be prepared to transfer money to a “safe account” in such circumstances.

Likewise, you may receive an email ostensibly containing a link to your bank’s website. In reality it could be to a bogus site using the branding of the original.

Two common scams to look out for

Here are two common examples of how scammers could target you. In each of these cases you may well think that you’d never fall for something so obvious, but many people have, and are doing so all the time.

  1. The “can’t miss” investment offer

This scam could reach you through a variety of methods such as a phone call, an email, or an online advertisement.

You’ll be offered a limited investment opportunity that will allegedly provide you with a huge, guaranteed return after a certain period.

A key point to note here is the “limited” criteria. Scammers always like to rush their victims, because they know if you are given the chance to stop and think you’re more likely to see through the scam.

In reality, the investment offer is either a high-risk investment that will pay the scammer a high rate of commission, or it’s completely non-existent and your money will be lost as soon as you’ve paid out.

  1. The fraudulent bank communication

This method can be particularly effective as it preys on your fear of being scammed by apparently warning you about your money being targeted.

You’ll receive a text message or email from your bank asking you to click on a link to verify a recent purchase as your bank believes it’s suspicious.

In the likely event that you may have recently carried out an online transaction, you may click on the link. You’ll then be asked to put in your bank account details and online password to approve the payment.

It doesn’t take much thinking to work out what a scammer could do, very quickly, with all your personal bank information.

5 ways to protect yourself against scammers

Here are five simple ways you can protect yourself from even the most determined scammers. We would also suggest that you share these with your friends and family, particularly the elderly who can be more susceptible to online fraud.

1. Remember the golden rule

This relates specifically to investment scams. The golden rule is, quite simply, that if you think an offer or investment opportunity sounds too good to be true, it nearly always will be.

2. Always slow down and take your time

As you’ve already read, scammers will often try to rush you into making a decision. They’ll intimate that a certain offer is “only available today”, or they’ll say you need to act quickly because your account is being targeted “right now”.

Forcing yourself to slow down, and being methodical when you’re carrying out online transactions or dealing with financial issues, means you’re more likely to see through the scam.

3. Don’t buy anything from cold-callers

It’s highly unlikely you’d ever buy anything from someone who walked up to you in the street and tried to sell it to you. So, adopt the same approach with similar offers or the phone on in an email.

By automatically being wary, however attractive the offer sounds, you’ll be far less likely to fall victim to a fraudster.

4. Split your bank details if you can

This practice won’t protect you from a specific scam but can help make you less prone to future ones.

Scammers will often target unencrypted online communication to try and steal people’s bank details. You can protect yourself quite easily by not sending all your bank details in one message if you need to supply them.

Even if you’re sending the information to someone you know and trust, always split up the details   and use one method such as an email for one part, and a text or WhatsApp message for the other.

5. Always be cautious when you’re shopping online

These days it’s difficult to avoid shopping online. It’s become such an easy way to purchase goods and services that you probably wonder how you managed without it!

Sharing your personal details online can also raise obvious security issues.

Always try to research companies you’re dealing with online for the first time. Look at online reviews or carry out a simple search engine check on the company name.

Then, if you’re buying from them on their website, check that it’s secure. There will be a padlock symbol next to the web address if the site is encrypted.

You can also help protect others

Publicity is often the enemy of scammers, so sharing details about how scammers have tried to target you can help protect others.

The Australian government have set up Scamwatch where you can report attempted scams and check details yourself.

Get in touch

If you have any queries about financial scams or think you may have been the victim of a scam please get in touch with us.