Everyone is vulnerable to scams, so everyone needs information about how to identify and avoid being scammed. Some people think that only the gullible and greedy fall victim to scams, however, this is not always the case. In this blog, Associate Adviser, Sam Crugnale gives some insight on the amount of money that has been lost due to scams and how to protect yourself to avoid being scammed.
The truth is scammers are clever and if you don’t know what to look out for, anyone can fall victim to a scam. Have you received an offer that seems too good to be true? Perhaps a phone call to help fix your computer or a threat to pay the money you do not owe? An alert from your bank or telecommunications provider about a problem with your account or even an invitation to ‘befriend’ or connect online? Scammers know how to press your buttons to get what they want.
In 2020, Scams Awareness Week was held in August (17-21 August 2020). At the time, the ACCC’s Scamwatch had reported that over $175 million had been lost in 2020 (including August) to people falling victim to scams.
Below is a further breakdown of these figures, including the different types of scams that contributed to them.
| The ACCC’s Scamwatch: Scam statistics* | |||
| Scam types | Calendar years | ||
| 2019 | 2020 | 2021 (to date) | |
| Attempts to gain personal information | $15,805,156 | $14,622,678 | $18,877,623 |
| Buying & selling | $19,708,437 | $36,368,687 | $19,55,488 |
| Dating & romance | $28,606,215 | $38,916,120 | $28,177,916 |
| Fake charities | $411,588 | $133,214 | $58,651 |
| Investments | $63,018,802 | $66,818,33 | $84,435,074 |
| Jobs & employment | $3,396,999 | $1,554,689 | $2,091,290 |
| Threats & extortion | $4,411,958 | $11,907,584 | $9,559,487 |
| Unexpected money | $3,911,841 | $3,029,909 | $1,721,394 |
| Unexpected winnings | $3,165,156 | $1,961,355 | $1,241,884 |
| Other | $462,065 | $382,014 | $515,663 |
| Total | $142,898,217 | $175,694,583 | $166,174,470 |
*Australian Competition and Consumer Commission, Scamwatch. (2021). Scam statistics.
Investments
In 2020, 7,744 reports were submitted regarding this scam type, and of these, 33.7% were reported with financial loss. The three main delivery methods (based on the amount lost) were phone, internet, and social networking. Within this scam type, there are several scam sub-types, including betting and sports investment scams, investment scams, other business, employment and investment scams.
How to protect yourself
- Never send money or give credit card, online account details or copies of personal documents to anyone you don’t know or trust
- Avoid any arrangement with a stranger that asks for up-front payment via money order, wire transfer, international funds transfer, pre-loaded card or electronic currency, like Bitcoin. It is rare to recover money sent this way
- Seek advice from an independent professional such as a lawyer, accountant or financial planner if in doubt
- Do an internet search using the names, contact details or exact wording of the letter/email to check for any references to a scam – many scams can be identified this way
- If you think it’s a scam, don’t respond — scammers will use a personal touch to play on your emotions to get what they want
Moving forward
When it comes to scams, if it seems too good to be true, it probably is. With the sheer number of scam types around, it’s important to be alert, aware, and protect yourself from them. Among other things, the potential financial loss from a scam can be devastating to both you and your loved ones.
Protect yourself don’t let anyone pressure you into making decisions about your money or investments—especially if the offer has come out of the blue.
Lastly, if you believe that you’ve been the subject of a scam, consider making contact with Scamwatch (ACCC) and other relevant parties (e.g. your financial institution and government agencies).