Fakes, frauds and swindlers: How to spot a scammer and save your cash

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We’ve all heard the saying “if it sounds too good to be true, it probably is”, and we generally accept it. Unfortunately, it’s human nature to selectively ignore this wisdom when we come across something we really want to be as good as it sounds, and all our acumen gets thrown out the window.

The ATO messaging you about a $20,000 tax refund? Sounds good! Someone wanting to buy your dusty old couch for $400 on Facebook Marketplace? Sure!

Australians lose hundreds of millions of dollars every year to scams.Credit: Michael Howard

This, and many other reasons, are why Australians lose hundreds of millions each year to scams, with the ACCC’s Scamwatch division reporting that in 2023 we gave away $480 million to scammers – though this is down on the whopping $569 million in losses reported in 2022.

What’s the problem?

These scams come in many different styles, from incredibly sophisticated investment and business-targeted scams, to relatively simple false billing and phishing scams. With the many and varied ways criminals are trying to pilfer your money, it’s easy to see how so many people fall for scams.

I’ll admit, I’ve gotten very close to falling for a few myself, only at the very last minute realising I was about to be ripped off, and with the advent of AI and different payment platforms, they’re only going to get harder and harder to spot.

What you can do about it

If you’re worried about getting scammed, or want to try and prevent your friends or family from falling victim, here are some things to know:

• Get across them: As mentioned, the types of scams you could fall for are numerous and getting more complex every day. They include, but aren’t limited to, romance scams, jobs and employment scams, investment scams, marketplace scams, and impersonation scams. Trying to explain what each of those are would take many thousands of words, so your best port of call is somewhere like the ACCC’s website or its Little Black Book of Scams, which outlines the main scam types and how they’ll typically appear.

• Know the signs: Even if you’re across every type of scam, that doesn’t mean you won’t fall for a particularly sophisticated one. Associate Professor Yenni Tim from UNSW’s School of Information Systems says it’s important to know the signs of a scam, so you can pick up on the vibe even if you may not know the specific type of scam the scammer is attempting to pull. “Scam messages often carry a sense of urgency or invoke fear to prompt immediate action,” she says. “The rule of thumb is, if it seems too good to be true, it probably is. Always cross-check with independent sources before sharing any personal or financial information.” Common signs are things such as incorrectly spelled URLs, demanding to be paid by wire transfer or PayID, or offering to have a friend or brother come and pick up the item you’re selling. Scammers can also have sophisticated ways to try and “prove” they are who they claim to be, so if you’re not sure, hang up on them or delete the message. You can then independently follow up with the company they claimed to be from to see if what they said was legit.
• Protect your family and friends: Scammers can often try to impersonate people you know to try and rip you off, Tim says, so it’s wise to authenticate any suspicious looking messages with the person through a different channel of communication. “With the widespread use of social media, it is also important to be cautious about the amount of personal information we share online. Adjust your privacy settings and carefully consider what information you make public,” she says. Talking to your family, especially older relatives, about scams can also help protect them, with those over the age of 45 more susceptible to scams than other age groups. And if you or your loved one receive a message that starts with “Hi Mum/Dad” and claims to be from your child who has lost or broken their phone and got a new number − delete immediately!
• What to do if you’ve been scammed: If you’ve realised you’ve fallen victim to a scam, the first thing to do is to stem any further losses. If you gave up your credit card or bank details, cancel the card and contact your bank immediately. If you paid using a service such as PayPal, there are methods for retrieving lost funds, and banks may be able to put a freeze on the money you’ve sent if you act quickly enough. Finally, it’s worth contacting IDCARE, a national identity and cyber support service that assists individuals affected by scams and fraudulent activities, on 1800 595 160.

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.