Con artists make entertaining subjects for Hollywood script writers (think The Wolf of Wall Street, Ocean’s Eleven and Catch Me If You Can), but there’s nothing enjoyable about being conned and fleeced in real life.

On the latest figures available, Australians lose over $10 million every month to scammers. There are plenty of rackets running at any one time involving pyramid schemes, identity theft, fake lottery wins and non-existent inheritances, but the unholy trinity of cons are:

1. Investment scams

2. Dating scams

3. Fake billing scams
   

Investment scams

The grift: According to the ACCC, investment scammers mainly target those in the 45-64 age group; people who are likely to have amassed some capital and wanting to set themselves up for retirement.

Investment scams usually involve traditional investment products, such as commodities, stocks and real estate. Nowadays, the investment often has something to do with cryptocurrency or binary options (i.e. betting on events, such as a company’s share price rising.)

The fraudster typically cold calls, texts or emails the victim. They pose as a knowledgeable insider (e.g. a stockbroker) who’s able to facilitate a low risk, high return investment. Often fraudsters will spend considerable time grooming victims and direct them to a professional-looking website or send them impressive-looking documents.

Red flags: Firstly, being called, texted or emailed out of the blue by someone offering an investment opportunity. Secondly, being assured the investment opportunity involves no or negligible risk while offering incredible returns. Visit the ASIC’s MoneySmart site to review the list of companies it’s identified as dodgy and we can provide advice on any investment opportunity you may be considering. 

Dating scams

The grift: Almost all online daters are guilty of gilding the lily. But if an online match seems too good to be true and they start requesting financial assistance, you’re at high risk of losing your shirt (and not in a good way).

Romance scammers’ MO is as straightforward as it is heartless. They create a fake profile, ‘love bomb’ their marks and possibly encourage them to ‘sext’, so they have embarrassing images to use as blackmail.

Then they start asking for money, gifts or bank account details, claiming a family member needs a medical procedure, or they want to buy a plane ticket to meet in person, or they need to transfer money to another country.

Red flags: It’s rarely a good sign if there are puzzling inconsistencies (e.g. someone who claims to be an educated professional making basic spelling mistakes). Equally if the relationship escalates abruptly (e.g. professions of undying love after a few brief exchanges), or if your new paramour is cagey about revealing themselves or their personal details (e.g. they claim they are unable to Skype or won’t reveal their address). 

Fake billing scams

The grift: Fake invoices are sent to a businessperson for things such as office supplies or a domain-name renewal. A common variant of this swindle is fake notifications from the ATO claiming a tax debt needs to be paid urgently to avoid dire legal consequences.

Red flags: Businesses do have expenses and individuals do need to pay taxes so it can be easy to be taken in by fake bills, especially if you don’t examine them carefully.

Two signs a charge is dubious are mistakes (e.g. the domain name you’re being asked to renew is misspelled on the bill) or odd conditions (e.g. the ATO saying it will accept gift cards or bitcoin as payment).

If you have any doubts, Google the business or government agency then ring its helpline to confirm your debt is real. (Don’t use any of the contact details supplied on the invoice.)

For information on the latest scams and who they are targeting, visit the government’s Scamwatch site. The ATO also regularly updates its scam alerts.

Swindlers seek to leverage powerful emotions – greed, love and fear – to encourage their victims to act impulsively. If you receive an approach or a request for money that doesn’t seem quite right, hang up or exit the website and do some background checks. If you’re unsure we can help you spot the scam and protect your financial future.

And remember… as the saying goes, if it seems too good to be true, it probably is.

Ben Widdup
EGU | Financial Adviser

i https://www.scamwatch.gov.au/about-scamwatch/scam-statistics?scamid=all&date=2019-03