BB Fact Sheets – Money – Scams 

What is a ‘Scam’?

• The Australian Securities & Investments Commission provides some very interesting information on Scams which are becoming familar in our 'inbox' and phone messages. Here are some excerpts from ASIC:

• It looks real - Scams that catch people often look realistic and are presented professionally. They have attractive documents, a business-like website, and names that sound like reputable companies.

• Bigger and faster profits than real investments - Scams always offer a higher return than genuine investments. Some offer 20% a year, others go for 300% a year or even more. It's too good to be true. By comparison, Australian shares are some of the most successful investments, and their value has grown about 7-9% p.a. over the long term.

• Less risk and less effort than real investments - Most scams say that financial success is easy and risk isn't a problem. But real wealth demands planning, hard work and guts. Even the best investors make mistakes and have to weather storms like market busts and economic recessions.

• Something special that genuine investments don't offer – It could be a 'secret' offer, 'inside information' or 'new techniques' to make you feel like you've got an edge over other people. But chances are it's a fairytale - and it won't have a happy ending.

• More urgent than the real thing - Scammers often say 'don't miss out' and 'act quickly before it's too late'. They're really just trying to grab your money before you have a chance to check properly.

Baby Boomers and Scams

Some examples experienced by Baby Boomers detailed by ASIC include:

• Nigerian scams - Although 'Nigerian' is the name given to it, this scam is international. The letter or email you get may also pretend to come from another country, such as Sierra Leone, the Congo, the Ivory Coast, South Africa, Mauritius, Philippines or Azerbaijan. In fact, the scam operator may be in the US, or Australia, or anywhere.

• Emails pretending to be from reputable organisations - Sometimes the scammers use the names of reputable organisations to make you think that they are legitimate. An example is a spam email purporting to be from AUSTRAC offering to give you alleged access to 'frozen/seized' funds. These types of emails or letters are the same as Nigerian scams, just with a different dressing.

• Pyramid schemes - In a nutshell, pyramid schemes promise to make you money. You pay the person who recruits you for the right to go out and recruit your new members to the scheme. In turn they must pay you for their right to recruit their own new members. The scheme builds up layer upon layer of recruits, forming a pyramid.

Every pyramid collapses. Most commonly, people give up because they cannot sell enough to recover the money they originally paid to participate. They find it much harder than they think to sell overpriced goods or services, especially to friends and social contacts. Schemes also inevitably run out of new recruits, although this may take some time to happen.

• Fraudulent emails - The more you use the internet, the more you appreciate its convenience and access to services like banking and shopping. Unfortunately, the internet is exploited for frauds that sometimes look surprisingly genuine. Here are some of the tell tale signs of typical frauds, and some safety checks you can use to avoid them. You get an email out of the blue with some story about why you have to reply. The email claims to be from your bank, credit card company or some other service you use. It usually asks you to send your account details, and sometimes your PIN, either by return email or through a website. The emails include fake surveys, fake security and maintenance upgrades, phoney investigations, false bills and charges, money has been withdrawn from your account.

Top Tips for Dealing with a Scam

Safety checks to protect yourself from email scams suggested by ASIC include::

1. First, stay calm

It's natural to be alarmed by an email claiming your account has been frozen or your credit card information has been stolen. Resist your first impulse to reply. Never follow the instructions in the email.

2. Keep your computer secure

Some frauds can lure you into opening an email or attachment that secretly installs a 'trojan' that allows scammers to monitor your computer and access your bank, credit card and other accounts.

• Get an effective virus protection program and regularly download the latest version. If you have not upgraded for the past six months, your protection is probably inadequate.

• Get a 'firewall' to protect your computer from unauthorised access over the internet. This is especially important for broadband users.

• Delete suspicious emails without opening them. Avoid opening dubious attachments, even if the email seems to comes from someone you trust.

• Change your PINS. Regularly change your internet banking and shopping PINs. Some banks recommend changing your PIN as often as every month.

3. Go to the official website for your financial institution

Use your 'favourites' to go to the official website for your financial institution or type its URL in the address bar of your web browser.

Never click any link in an email unless you're certain the email comes from a trusted source. The hyperlink leads only to trouble.

If there is a real problem, the genuine website will almost certainly tell you on its home page. You will not have to fix it by emailing confidential information. Some scam sites even show the padlock at the bottom of your web browser giving you a false sense of security.

4. Be suspicious if asked for details in an email

Suspect a scam if you’re asked for your account details or your passwords by email.
Legitimate companies never ask for your account details or your passwords by email. If you get this kind of email, it's almost certainly a scam.

5. For Australian sites, look for the ‘ .au’ domain such as ‘com.au’ or ‘net.au’

In Australia anyone registering an .au domain must show a link between the proposed URL and an Australian trading entity. To date, ASIC has not come across a phoney .au site, although that doesn't guarantee it will never happen.

Despite this protection you must still be suspicious of any link given to you in an email .

The address of your bank's real website can still appear as part of the link to a false website. The familiar link words in the URL are there to trick you by making you feel comfortable. But your website browser doesn't read all parts of the link and takes you to a false site.

6. Take a few privacy precautions

Some authorities suggest avoiding personal transactions at Internet cafes, community centres and libraries. In some places, criminals have loaded software that records keystrokes.

Check that nobody is looking over your shoulder and keep private information out of chat rooms or email.

7. Act quickly if you think you’ve been conned

If you get a suspicious email contact your financial institution or your legitimate service provider directly: do nothing about the email. Do not respond to any contact details in the email.

If you're still uncertain or if you have sent any details through an email or website you’re a bit worried about, email or phone your financial institution or the legitimate service provider through their customer support department, and ask them to confirm the email's authenticity. They will tell you what to do next.

Credit and Debt Hotline                                                         - 1800 808 488

Centrelink Financial Information Services                               - 13 23 00

ASIC information line                                                              - 1300 300 630

Office of Fair Trading – NSW                                                  - 13 32 20                

Office of Fair Trading - QLD                                                  - 13 13 04

Consumer Affairs - VIC                                                         - 1300 558 181

Department of Consumer and Employment Protection - WA - 1300 30 40 54

Office of Consumer and Business Affairs - SA                       - 08 8204 9777

Consumer Affairs and Fair Trading - TAS                              - 1300 654 499

Consumer and Business Affairs - NT                                     - 08 8999 1999

                                                                                              - 1800 019 319

Office of Fair Trading - ACT                                                  -  02 6207 0400

Australia - http://www.fido.gov.au/fido/fido.nsf#

              - http://www.understandingmoney.gov.au/content/consumer/financialliteracy/protecting/

              - http://www.asic.gov.au

              - http://www.asx.com.au/

Scamwatch         - http://www.scamwatch.gov.au/content/index.phtml/fromItemId/694058

High Tech Crime - http://www.ahtcc.gov.au/

Indigenous          - http://www.fido.gov.au/fido/fido.nsf/byHeadline/Indigenous

Multicultural         - http://www.fido.gov.au/fido/fido.nsf/byHeadline/Publicationsinotherlanguages

NSW  - http://www.fairtrading.nsw.gov.au/shopping/scams.html

QLD  - http://www.fairtrading.qld.gov.au/report-a-consumer-scam.htm

VIC   - http://www.consumer.vic.gov.au/CA256F2B00224F55/page/List+of+Scams

WA   -  http://www.docep.wa.gov.au/ConsumerProtection/scamnet/default.html

SA    -  http://www.ocba.sa.gov.au/scams/

TAS  -  http://www.consumer.tas.gov.au/fair_trading/scams

NT    -  http://www.caba.nt.gov.au/scams.shtml

ACT  -  http://www.accc.gov.au/content/index.phtml/quickLinkId/816519/whichType/org

Australian Bankers Association:               - http://www.bankers.asn.au/Default.aspx?ArticleID=716

Protecting your money and identity theft  - http://www.bankers.asn.au/default.aspx?ArticleID=980

Typical scams - http://www.fido.gov.au/fido/fido.nsf/byHeadline/Scamstypesofscams

Cold calling blacklist -  http://www.fido.gov.au/fido/fido.nsf/byheadline/unlicensedoverseascoldcallers

Reporting scams - http://www.fido.gov.au/fido/fido.nsf/byHeadline/Scamsreporting

Get rich quick schemes - http://www.fido.gov.au/fido/fido.nsf/byHeadline/Getrichquickschemes

Pie in the Sky schemes - http://www.fido.gov.au/fido/fido.nsf/byHeadline/PieInTheSkyAwards

Check that a business or person is licensed - http://www.fido.gov.au/Checkpeoplecompanieslicensed

Banned people - ASIC -  http://www.search.asic.gov.au/ban.html

Investment schemes - http://www.fido.gov.au/fido/fido.nsf/byheadline/Checkingtheinvestment

Product disclosure statement -  http://www.fido.gov.au/fido/fido/byheadline/Productdisclosurestatement

Little Black Book of Scams -  http://www.accc.gov.au/content/TheLittleBlackBookOfScams08

Commonwealth Financial Counselling - http://www.fahcsia.gov.au/sa/families/cfcp-cfcp_directory.aspx

Financial Counselling Services in Australia- http://www.fido.gov.au/Financial+counselling

Centrelink Financial Counselling Service - http://www.centrelink.gov.au/internet.nsf/services/

List of Personal support services - http://www.fido.gov.au/byHeadline/Personal%20support

Commonwealth - Rural financial counselling scheme - http://www.daff.gov.au/agriculture-food/drought/rfcs

Disclaimer: The information contained in this section should not be used for individual financial advice. Please seek independent financial advice if you have concerns or specific questions relating to your money.

This article was created by Jennifer Lawrance for babyboomers.com.au - Australia's website for Baby Boomers. Sources include ASIC and the Federal Government. Babyboomers.com.au is an online resource to help people find information and services on health, money, travel and recreation

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