Can you spot the scam?
Click the button below to take a quiz by Scamwatch to test your knowledge.
What Is A Scam?In the financial world, scams are forms of theft. Scammers try to gain money using multiple different methods such as stealing your information, getting you to reveal your personal details (such as your credit card number), or even tricking you into willingly giving them money. People over the age of 65 are particularly prone to falling for scams, and as of 2023, almost one hundred thousand scams have been reported; with almost two hundred million Australian dollars lost. (ScamWatch)
It's important to know about scams because awareness is one of the best ways to prevent one from happening. As previously stated, scams cause huge monetary losses, and to create a thriving economy and stock market, we need to eliminate the risk of scams as much as possible. |
Types of Scams According to ScamWatch
Investments
Investment scams feature promises of payments, quick money, or guaranteed returns with very little risk. During 2021, when Bitcoin reached an all-time peak of over sixty thousand dollars, over twenty-six million was lost to investment scams. As of 2023, men are most prone to investment scams, most of which are delivered over the phone. Romance Scammers use emotional triggers to prey on people looking for romantic partners to obtain money, gifts, or personal information. According to Scamwatch, men aged 35-44 are most prone to these scams (2023) which are usually found in mobile applications such as dating apps. Threats/Extortion Extortion scams include using malware*, ransomware*, and threats to life or arrest. As of 2023, these types of scams are most often delivered through email to people aged over 65. Money/Winnings These scams often come in the form of inheritance scams, rebate* scams, "scratchie"* and travel-prize scams. These are usually delivered through email to women (2023). *Rebate: Rebate is a partial refund to someone who has paid too much for a good or service *Ransomeware: Ransomeware is a common type of malware. It involves a hacker locking up (or encrypting) your files and requiring ransom (or payment) to restore access *Scratchie: "Scratchie" is short for "scratch card" *Malware: Malware is a general term for computer viruses, trojans, and other destructive software used to disrupt devices and access personal data |
Figure 1: Investment Scams Statistics
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"If it's too good to be true, it probably is"
Employment
The most common form of employment scams are pyramid schemes. To put it simply, a pyramid scheme involves a system of making money by constantly recruiting new "investors". As of 2023, women have been the most prone to these scams, which have been delivered using email. have been the most prone to these scams, which have been delivered using email. Fake Charities Fake charities include scammers posing as a genuine charity to receive donations. These occur all year round, but are most common after natural disasters. These scams are usually delivered through email to women. Identity Theft Identity theft scams occur when a scammer uses someone else's identity to gain money or other benefits. Common methods of identity theft include phishing*, hacking, and malware/ransomware. Women are most prone to these scams in 2023, which usually arrive through text. *Phishing: Phishing is a trick used by scammers to make you share personal information |
Figure 2: Scam Exposure Rates
A famous case study of an Identity Theft scam is when Phillip Cummings stole $33,000 credit reports which cost his victims approximately $100,000,000 in 2002. This was believed to be the largest identity theft case in America, and one of the largest in the world (justice.gov).
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How To Avoid Scams
Consumer Protection (NZ) offers eight things that you can do to protect yourself from scams.
1) Be suspicious
2) Don't trust unexpected contact
3) Do your research
4) Resist demands to act quickly
5) Keep virus protection on your devices up to date
6) Don't open attachments or click links in emails if you're unsure of the sender
7) Use different passwords for every online service
8) Reserve the right to be impolite
Always protect your personal details! Never share any personal information with anyone, especially not online. Personal information can include your full legal name, address, credit/debit card number, signature, or phone number. Some information is more private than others, so ensure that your details are secure at all times.
1) Be suspicious
2) Don't trust unexpected contact
3) Do your research
4) Resist demands to act quickly
5) Keep virus protection on your devices up to date
6) Don't open attachments or click links in emails if you're unsure of the sender
7) Use different passwords for every online service
8) Reserve the right to be impolite
Always protect your personal details! Never share any personal information with anyone, especially not online. Personal information can include your full legal name, address, credit/debit card number, signature, or phone number. Some information is more private than others, so ensure that your details are secure at all times.
Got Scammed?
Act fast! Immediately stop interacting with the scammer and block them. Contact your bank to report the scam and ask to stop any transactions to prevent the scammer from stealing any more money. There are different steps you must take depending on how you transferred money.
Debit or credit card? Contact your bank to stop any transactions.
Gift card? Report it to the company of the card.
Wire transfer? Report it to the wire transfer company or your bank.
Crypto? Report it to the platform or company you used to transfer the money (be careful with crypto scams because digital money might not be recoverable)
Cash? Contact Australia Post or the delivery service you used to send the money (sometimes they can intercept the package and get you your money back)
Unauthorised transfer? Report it to your bank and ask them to freeze your accounts
Debit or credit card? Contact your bank to stop any transactions.
Gift card? Report it to the company of the card.
Wire transfer? Report it to the wire transfer company or your bank.
Crypto? Report it to the platform or company you used to transfer the money (be careful with crypto scams because digital money might not be recoverable)
Cash? Contact Australia Post or the delivery service you used to send the money (sometimes they can intercept the package and get you your money back)
Unauthorised transfer? Report it to your bank and ask them to freeze your accounts
You will be redirected to Scamwatch to report a scam
Getting scammed can feel awful.
If you're a victim, consider speaking with a counsellor.
Beyond Blue: 24/7 support and counselling. Mental health check-ins and professionals
BetterHelp: Online therapy including therapy for individuals, couples, and teens
Lifeline: 24/7 Suicide prevention
BetterHelp: Online therapy including therapy for individuals, couples, and teens
Lifeline: 24/7 Suicide prevention