Financial scams and fraud are becoming more sophisticated, targeting individuals through phone calls, emails, social media, and even investment schemes. Scammers use psychological tactics to manipulate victims, often creating a sense of urgency, fear, or excitement to trick people into handing over money or personal details.
According to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, Australians lost over $3.1 billion to scams in 2022 alone, with investment scams, remote access scams, and identity fraud among the most common.
Common Types of Financial Scams
Understanding the different types of scams can help you identify red flags before it’s too late. Here are the most common ones:
Investment and Cryptocurrency Scams
How It Works: Scammers promise high returns with little or no risk, often using fake websites, social media ads, and cold calls.
Red Flags:
- Guaranteed profits with no risk.
- Pressure to invest quickly.
- Unlicensed investment firms.
Example: A fake trading platform offers “guaranteed” 15% monthly returns but disappears once money is deposited.
How to Protect Yourself:
- Check ASIC’s Moneysmart website for licensed investment firms.
- Be sceptical of social media investment ads.
- Never share banking details with unverified sources.
Phishing and Identity Theft Scams
How It Works: Scammers send fake emails, texts, or calls pretending to be from banks, government agencies, or companies. They try to steal login details, passwords, and personal information.
Red Flags:
- Unexpected emails or texts asking for personal details.
- Links that look legitimate but lead to fake websites.
- Caller ID spoofing, where scammers pretend to be from known institutions.
Example: You receive an SMS claiming to be from your bank, saying your account is compromised and you need to click a link to reset your password—but it’s a phishing site.
How to Protect Yourself:
- Never click on links in unsolicited emails or texts.
- Contact organisations directly through official phone numbers.
- Use multi-factor authentication on banking and email accounts.
Romance Scams
How It Works: Scammers build emotional relationships online and eventually ask for money, often claiming financial hardship or needing help with an emergency.
Red Flags:
- They refuse to meet in person.
- They ask for money for travel, medical emergencies, or business needs.
- Their social media profiles seem too perfect or inconsistent.
Example: A scammer pretending to be a wealthy businessperson gains your trust over months, then asks for $10,000 to fund a “business deal” that never existed.
How to Protect Yourself:
- Never send money or share financial details with someone you haven’t met in real life.
- Reverse image search profile photos to check for fakes.
- Report suspicious accounts to dating platforms.
Remote Access Scams
How It Works: Scammers pretend to be from Telstra, NBN, or Microsoft, claiming your device is infected. They ask you to install remote-access software, allowing them to control your computer and steal banking details.
Red Flags:
- Unexpected tech support calls about viruses or slow internet.
- Requests to install TeamViewer, AnyDesk, or LogMeIn.
- Demands for payment in gift cards or cryptocurrency.
Example: A scammer calls, claiming “suspicious activity” on your NBN connection and asks you to install software to fix it. They then steal banking details and transfer funds.
How to Protect Yourself:
- Hang up on unsolicited tech support calls.
- Never install remote access software unless you initiate the request.
- Contact your service provider directly if you have concerns.
Business Email Compromise (BEC) Scams
How It Works: Scammers hack into business emails and impersonate CEOs, suppliers, or employees to request payments to fraudulent accounts.
Red Flags:
- Sudden changes to payment details.
- Emails that look slightly different from the real company domain.
- High-pressure tactics urging immediate payment.
Example: A scammer emails a business, pretending to be a supplier, and asks for $50,000 to be transferred to a “new” bank account.
How to Protect Yourself:
- Verify bank details directly with suppliers before making large payments.
- Use two-step verification for financial transactions.
- Train employees on scam awareness.
How to Protect Yourself from Scams
- Verify First, Act Later – If you receive an unexpected call, email, or message asking for money or personal details, always verify the source independently before taking action.
- Use Strong Passwords & Multi-Factor Authentication – Secure your bank accounts, emails, and social media with unique passwords and multi-factor authentication (MFA).
- Verify Through Trusted Resources – Before investing or engaging with a financial service, check if the company is registered on ASIC’s Moneysmart website and look for scam warnings on Scamwatch. Also make sure to do necessary research first before dealing with businesses. For example, if you are looking to apply for an online loan, see to it that you are communicating with a licensed lender or you can use loan matching sites like Friendly Finance to ensure the safety of your information.
- Ignore Pressure Tactics – Scammers create urgency to make you act without thinking. If someone says, “You must act now, or you’ll lose money”, it’s likely a scam.
- Be Cautious with Personal Information – Never share your bank details, Medicare number, or driver’s licence unless you’re 100% sure who you’re dealing with.
- Monitor Bank Statements Regularly – Check your transactions weekly to spot any suspicious charges early.
- Report Scams Immediately – If you’ve been scammed, report it to:
- Scamwatch (ACCC) – www.scamwatch.gov.au
- Your bank – To freeze fraudulent transactions.
- Australian Cyber Security Centre (ACSC) – For online scams and hacking attempts.
What to Do If You’ve Been Scammed
If you realise you’ve fallen victim to a scam, take these steps immediately:
- Contact Your Bank – Report the fraud and ask if the transaction can be reversed.
- Change Your Passwords – Update all email, banking, and social media passwords.
- Enable Two-Factor Authentication – Add an extra layer of security to your accounts.
- Report to Scamwatch & ACSC – This helps authorities track scam operations.
- Warn Others – Share your experience with friends and family to prevent more victims.
Financial scams are becoming more sophisticated, and anyone can become a target. The key to staying safe is awareness, vigilance, and verifying before acting.
By knowing how common scams work, recognising red flags, and following best security practices, you can protect your money, identity, and financial future from fraudsters.
