Barefoot Investor: What to do when a phone scammer calls

Surely nobody falls for it? Sadly, yes - Aussies lose $36 million a year to phone scammers. Here’s what you do when they call.

Don’t fall victim to phone scammers, warns Scott Pape.

After hours of crying, our baby finally dropped off to sleep in his mother’s arms and then her phone rang.

The noise startled our son, and he began wailing.

“ANSWER IT!” she thundered at me.

I dived on her phone and shepherded it out of the bedroom.

“Hello?” I whined.

“A warrant has been issued for your arrest. Press 1 immediately”, said the recorded message.

I was so sleep-deprived that I complied, and was promptly transferred to a human.

“We have found a discarded rental car with 20 pounds of cocaine, fraudulent bank statements, and bloodstains on the seats — the car was rented in your name,” announced the man on the end of the line.

“Who is this?” I yelled.

“My name is Richard Solman. I am an Australian Federal Police Officer. My badge number is 78291. Write that down. Your case number is 4859885. Write that down, too. You are potentially in a lot of trouble”, he warned.

For the next few minutes our conversation reminded me of those I’ve had with my three-year-old when it suddenly dawns on her that her brothers are gone and she has my full undivided attention ... so she keeps the story going on, and on, and on, and on.

Then Richard went in for the kill.

He reminded me that the call was being recorded, and then asked for my ID.

And after I’d given him my (fake) details, he announced that I’d been a victim of identity theft.

“How much money do you have in your main account, Mister Tape?” he asked.

“I have $13,823,” I said precisely.

This got Richard audibly excited.

“I’m sorry to say that your accounts and your tax file number are compromised. All that money is at risk. We think it could be an inside job … a staff member from the ING bank”, said Rich.

Next, he ordered me to get in my car, drive to my nearest bank branch and transfer my money into what he called a ‘safe’ AFP account for 48 hours … while they got to the bottom of the case.

And all the time I was thinking to myself: “Who would ever fall for this rubbish?”

The correct answer, of course, is “enough people to make it more than worth their while”. 

Generally the most vulnerable people in our society — those with mental health issues and the elderly, who can be confused and intimidated.

Last year Aussies lost $36 million from spam calls.

Hold the phone! Here’s my take: Twenty-five years ago, the internet lowered the cost of sending spam emails to practically zero.

And our inboxes got hammered.

Sadly, Aussies lose $36 million a year to phone scammers. Don’t be one of them. Picture: Stock

Well, for a while, that is, until email providers created spam filters to shield us from the 320 billion junk emails sent each day.

Yet the scammers have now doubled down.

Technology has now lowered the cost of calling to basically zero, and spoofing technology makes it look like they’re calling you from a local number.

Which explains why Richard and his mates are just so damn busy.

They’re making 500 million spam calls around the world each day.

Yet telcos are busy building the phone version of spam filters (with a nudge from the government).

Telstra says it’s blocking up to 500,000 spam calls a day.

My prediction?

Spam calls will soon be as rare as spam emails in your inbox.

Until then if anyone rings you up with a warrant for your arrest, and asks about a discarded rental car with 20 pounds of cocaine, fraudulent bank statements, and bloodstains on the seats just press 1 ... and tell them it was Mister Tape.

Tread Your Own Path!

BAREFOOT ENDORSEMENT, PLEASE

LILLY WRITES: A reputable friend has suggested I invest in a CFX project (cryptocurrency foreign exchange).

From what I understand it is kind of like multi-level marketing and a type of cryptocurrency.

I have looked into it and it sounds good.

However, I am hesitant to pay out my hard-earned cash without some endorsement from someone like you.

I am planning a baby as a single woman at 45 and I bought my first home only a year ago, so I am looking at ways to increase my income and secure my future. Thoughts?

BAREFOOT REPLIES: You want my endorsement? Okay, here goes: No. No. No. Lilly, oh god no. No.

Is that emphatic enough for you?

Now, I’m betting your ‘reputable’ friend isn’t a brand-new homeowner who is about to become a mature-age single parent.

Lilly, you simply can’t afford to get swept up in this rubbish.

If you want to increase your income and secure your future — and that’s an admirable ambition! — work towards a qualification or skill that you can use when you’re at home with your bub.

SHOULD I TELL MY BOYFRIEND TO SHUT UP? HELLO!

WILLA WRITES: My husband and I are so close to having a 20 per cent deposit for our family home.

However, with the prices of houses being so ridiculously high right now, he wants to wait and meanwhile put our house deposit into shares in the hope that we will have more than enough money in a couple of years.

Should I listen to my husband or tell him to shut up?

BAREFOOT REPLIES: My first thought is to tell him to shut up. My second thought is to get him talking.

Here are some clarifying questions you might want to ask: “You reckon the property market is too high and due for a fall. Why wouldn’t that be the same situation for the share market? They’re both just assets, right?”

Whatever he answers, follow up with this: “No one can predict what’s going to happen in the share market, or the property market, in the next few years. It could go up, down, or sideways.”

That being the case, let’s run some scenarios now and see how we’d deal with them: “What would we do if our shares tank 50 per cent?”

(Wait to get his response. “It won’t happen” is not the right answer.

Ask him how he’d feel watching your deposit cut in half. Would he hold his nerve?)

“What would we do if the property market increases while we’re risking our savings in the share market?”

(Again, wait to get his response.) And, finally, hit him with this: “Are you unsatisfied with what we can currently afford?”

It sounds like that is the root of the problem … and there’s no shame in that at all.

In a rampant debt bubble, young people starting out have to make trade-offs.

Just make sure you’ve thought them through.

And that’s going to require a lot of talking, and thinking!

THE HSBC CHICKEN

ROSE WRITES: Your book arrived out of the blue on my doorstep one day.

Reading it, it was painful to realise how bad I was at managing money.

So I took action.

Just last week I paid off my third and final credit card!

For my job as a set designer I needed to make a papier-mâché roast chicken, so I used all my old HSBC bank statements.

As I glued each painful piece into the shape of a chicken, the weight of 24 years of debt fell away, and before my eyes the HSBC Chicken was born!

Thank you so much — you have helped me turn my life around.

BAREFOOT REPLIES: Congratulations! I usually encourage parents to blend their credit cards in front of their kids (a dramatic way of teaching them not to use them). Yet your idea is much more creative.

Winner, winner, chicken dinner!

Rose’s HSBC credit card is cooked!

Information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions.

If you have a money question, go to barefootinvestor.com and #askbarefoot.