It’s International Fraud Awareness Week. Here are three types of scams you should know about, and some tips on how to avoid them.
These days lots of people find love online, but there are also plenty of fraudsters trying to befriend people through dating websites.
Often fraudsters create fake profiles on legitimate dating websites. After establishing a close online relationship with someone, the fraudster will try to convince the person to send money – for example for a medical emergency or to cover travel costs.
Many people get caught up in romance scams, and it can be tricky to distinguish between love and fraud. If you’re in an online relationship and being asked to send money, a good initial test is: can you tell a close friend or family member about the request for money? If not, why not? And if you do tell a trusted person, what’s their reaction?
Cold calling scams
Fraudsters often cold call households pretending to be from real organisations, like telecommunications companies or government agencies. They then ask people to confirm details and trick them into providing information. The fraudsters can then use this information to help steal people’s identities.
If you get an unexpected call asking you to provide personal information, one tip is to tell the caller you’d like to confirm that the call is legitimate, and ask for the caller’s full name a number to call them back on. If the caller provides you with a number, go online to check the number corresponds to the correct organisation before you call back.
Some websites try to lock people into ‘investment’ opportunities by promising very attractive returns. Sometimes the investments don’t actually exist and the scammers just take the money; other times the sites are set up to look like investments but are really more like gambling. A recent popular example is binary options trading.
Remember that with any investment, there’s a relationship between risk and return. If the investment offers a return that sounds too good to be true, it’s worth spending extra time looking into whether the offer is genuine and what the risks are. The Australian Securities and Investment Commission’s MoneySmart website has good information on the latest scams and how to spot them.