How to avoid common financial scams

Australians aged 40-60 face an increased risk of being involved in cyber-scams, here's a few tips on how to avoid becoming a victim. 

There is an increased surge when it comes to financial security concerns online and beyond. Even Hollywood is recognising the rise of these cyber-scams with the tv show CSI: Cyber on Channel 10. Financial scams and more are being explored with actress Patricia Arquette leading a team of FBI investigators to keep the internet safer for all. 

Did you know? Australians aged 40-60 - particularly women - face an increased risk of being involved in cyber-scams.

Many of us are finding it difficult to navigate this often-confusing terrain to keep money we have worked hard for safe. With scams designed to infiltrate your security from every point of entry - your phones, your mail and the internet - it is important for consumers to be aware of integral rules for maintaining financial security. 

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The golden rules
The Australian Consumer and Competition Commission (ACCC) offers sound advice for avoiding the pitfalls of unwise investments and scams. On its SCAMWatch website, the ACCC offers users a useful online resource.

Have you seen or experienced something that doesn’t feel quite right? Help others by reporting it. The SCAMWatch Radar is a section for reporting scams and has a page featuring stories from victims involved in a vast array of dodgy dealings.

The ACCC's golden rules for safe dealings are simple yet effective. Take them on board and share them with friends and family to help those you love also avoid scams and fraudulent operators.

  1. Be realistic about the offer: If it looks too good to be true it probably is.
  2. Seek independent advice from legal counsel or your business planner: From large investments to odd commitments made online, independent advice can make all the difference.
  3. Never agree to an investment on the spot: Take the time to carry out your due diligence and contact your independent professionals.
  4. Don't ever send money or share your credit card details with people and sites that you don't know or trust: If they're not known to you, do not proceed to pay an online vendor or contact of spurious origin.
  5. Keep your bankcards safe and maintain a good ATM safety regime: With cameras and other scamming devices built into many publicly accessible ATM's, it is best to cover your hands while entering your PIN. Also, never keep a copy of your PIN inside your wallet.
  6. Remember that you can always contact the ACCC, ASIC and your state-based office of fair-trading: If you suspect that something is awry, make contact with the authorities and crosscheck your experiences with them. 

Identity Theft
It sounds like something from a movie (actress Melissa McCarthy gave it a funny take in her 2013 movie Identity Thief yet in real life it isn’t quite so hilarious). It is difficult to believe that one of the most common and invasive scams is identity theft. This involves dedicated scammers targeting your finances and personal security. It is a dangerous process often resulting in depleted bank accounts and strange financial events being attributed to the victim.

To help avoid identity theft, always keep a close eye on where your personal details are entered, and only give out your personal information if it is necessary and if you trust the recipient. The ACCC advises that people shred or cut-up their old bills and personal documents, no matter how insignificant. Really don’t want to get a paper shredder? At least reduce the risk by cutting or tearing up bills with personal details and putting them out in different sections of the rubbish on different days. Or take them in to work to use the paper shredder there. By using a paper shredder your paper documents will not be able to be accessed by scammers. The ACCC watchdog also advises consumers to regularly check their credit report and double-check bank statements for odd purchases.

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Money transfers
Be wary of sending any money in order to 'claim' or 'win' more money, as this is often a false promise. Be aware of chain letter systems or pyramid schemes; these are often pitched as 'get-rich-quick' systems. In addition to real-world scams, there are many online and phone based deceptions designed to elicit your banking details, so please be aware that any contentious purchase or subscription (mostly online) can come back to bite you. Love entering great competitions? Ensure you only enter on trusted sites.

Phone and Mobile Scams
Whether it's a text from an unknown number, or a seemingly innocuous chat with an over friendly or inquisitive call centre operator based overseas, there are many grifts that target consumers over the phone.

Though many telemarketing calls are still legitimate, it is relatively simple to separate the wheat from the chaff by asking the speaker to provide you with their name and the name of the company they represent. Note these details and proceed to finish the conversation. If they say they are calling from the tax office or even a mobile phone company you are with say you’ll call them back through the number you know to be correct from the official website. If they baulk it is an instant sign they can not be trusted so get off the phone immediately. Do not agree to any changes or deals from just a phone call, unless you can definitely trust the caller or verify their connection to you. Unless from a veritable source, never provide the caller with your credit card details or even mobile phone number or email. 

Identifying mobile SMS and MMS scams are easier to spot: phone numbers beginning with '190' are dubious, as are SMS and MMS messages from numbers beginning with the digits '19'. 

Online Security
This is an incredibly pertinent issue, given that the majority of our modern communications and transactions take place on the Internet. Even major banking, security and governmental institutions are capable of being penetrated by hackers or being copied by fraudsters. However, with a few simple tips, you can safely browse the web without worrying about breaches of security. 

Spam and analytic filtering software is the best starting point to limit your exposure and offer protection from those dreaded cyber-thugs. Get an anti-virus program for your operating system and let it manage your security in a simple and easy-to-interpret manner. If you can, add a few extensions to your browser and limit those nasty analytics and advertising bots from peeping into your browsing. Ghostery is a great free resource to block trackers, and HTTPS Everywhere is an advantageous application that encrypts your communication. In doubt? Next time you get your computer serviced or have a professional update your computer system speak to them about what you need to install to help protect yourself and your bank balance.

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In terms of browsing, never enter your personal details in pop-ups or sidebar advertisements. Be wary as many of these look like a regular system warning. Similarly, do not follow links within spam emails or communications from unknown sources. Harmful programs can be automatically downloaded to your computer without you knowing, and the end result can be disastrous. Try not to access any sensitive sites in a public Internet cafe or library, and make sure that your passwords are case sensitive, inventive and use different passwords for all of your accounts.

Financial security is a major issue for all of us, requiring a good deal of vigilance and attention to detail. With a bit of experience and these simple tips, you'll easily be able to distinguish the scam from the genuine offer. 

For more information on avoiding financial fraud, click here.

Have you heard of or experienced any financial scams? Join our conversation below…