Don’t fall for the scams!

Don’t fall for the scams!

International Missed Calls, Nigerian Money Transfers and WannaCry Viruses are just some of an array of tools that scammers use to wrestle money from intended victims. Their trade casts a wide net. Unfortunately, far too many of us are unaware of just how vulnerable we are to being scammed. 

Statistics from the Australian Competition and Consumer Commission (ACCC) show that Australians lost over $90 million to scammers in 2017 alone! The identity of the scam may change but the approach is generally the same – scammers are preying on people’s lack of financial literacy.  Scammers target the most financially vulnerable and especially the elderly, who are potentially unsure of the operation of their finances. Sadly, although there is a constant barrage of scams identified by the government agencies and media, far too many Australians are still falling victim to scamming and losing valuable assets from their accumulated wealth.

You need to be informed and keep a sharp eye on your financial accounts and be wary of unexpected offers appearing in your electronic dealings. Further to this however, you really need to make sure any financial deal that you agree to is based on heavily researched information. Taking someone’s word for something, especially when you haven’t done the hard yards yourself, is a recipe for financial disaster!

One area that you should immediately educate yourself with is the information available online describing scams. The ACCC (Australian Competition and Consumer Commission) runs a website to help identify the latest scam offers under The ASIC (Australian Securities and Investment Commission) educational website MoneySmart also has a section on scams and finally, financial providers such as Macquarie often provide articles warning of scams.        

Despite all of this information, it is much easier to wax philosophically on avoiding scams than it is to realise that you are the target as it happens. Far too often people are rather lax in their investigation of an offer because of an impending time limit, general weariness/fatigue and the feeling (that sales people prey on) of the need to do something now!

Quite often the victim is lulled into an initial enticement that provides a better than expected return which is followed up by the option to act quickly with an additional, much larger financial commitment. All of which will suddenly disappear at the next contact attempt or when an attempt is made to withdraw some funds from the scam account.

Interestingly enough, as I am putting together this article, a promise of easy won money arrives in my email “-💸 Your incoming BitCoin transfer (1.9868 BTC) – Only 3 days remaining!”. The enclosed link entices me with a value on today’s market of about $26,000!

The next steps would be the need to establish for a BitCoin account (easy) linking this to my bank account (also easy) and of course the opportunity to add to my gain by committing some more funds (maybe a point to give me pause). 

Where is this leading? Ultimately, Zero BitCoins for me and a wad of cash and my identity for the email scammer (who has a .tk web extension – look it up if you don’t know this is the home domain of most phishing promotions).

In 2014 an ANZ analysis identified certain financial attitudes that can help to explain the areas that are targeted by scammers:

  • Dealing with is money is stressful — an attitude that applies even when things are going well financially
  • Impulsivity — acting before thinking things through
  • Financial self-efficacy — self-belief in ability to change one’s financial situation
  • Financial aspiration — a desire to realise financial success associated with a strong achievement orientation.

Two quick checks you should always apply to any offer are:

  1. If it seems too good to be true then it usually is!
  2. If it were so easy to generate exceptional returns then why aren’t mainstream, intelligent investors operating in that space already?   

Essentially, avoiding these financial management attitudes and taking time to analyse the information before us can help us to avoid being duped. If you identify that you are vulnerable to any of the above then you need to set up a way of avoiding falling into any traps.

One of the best ways is to have someone working with you to manage your financial affairs and to be prepared to speak to them about any offers you receive, in order to gauge the reliability of any new “offers”.

Sacha Loutkovsky
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