Scammers operate in an ever-evolving space and the scams of today are far more sophisticated than they have ever been, targeting even the most financially literate individuals.
In addition to the financial impact from a scam, it can affect your mental health, so understanding how scammers operate is the best way protect yourself from falling victim to a scam.
A growing trend
The statistics provide a strong reminder that no one is safe from a scam – no matter how experienced or cautious you may be, it can happen at the click of a button.
According to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, Australians lost an alarming $3.18 billion to scams last year.
People are losing more of their money to scams than ever before, with the average individual loss rising by 50% last year to almost $20,000. This is due, in part, to scammers using new technology to lure and deceive victims, and it underscores the serious financial toll scams can take.
The most common types of scams:
Investment scams
Investment scams continue to be a major issue, with losses reaching around $1.2 billion in 2024. These scams often involve fraudulent online trading platforms or fake cryptocurrency schemes, designed to lure investors with promises of high returns and minimal risk.
Impersonation scams
Fraudsters are increasingly using sophisticated tactics to impersonate trusted organisations, such as government bodies, banks, and financial advisers. In 2024, impersonation scams accounted for $700 million in losses, with scammers using fake emails, phone calls, and even text messages to deceive victims into revealing sensitive personal information or parting with funds.
Romance and relationship scams
These scams often involve scammers establishing a personal relationship with victims before manipulating them into sending money. In 2024, these types of scams led to losses of $250 million, highlighting the emotional and financial damage they can cause.
While these figures are shocking, they also reflect the changing nature of scams. Scammers are no longer relying on clumsy, obvious frauds. Instead, they are using highly professional methods, often tailored to the specific interests, financial knowledge, and behaviours of their targets.
We’re all vulnerable
As scammers become more creative, even the most experienced and financially savvy individuals are at risk. There are several reasons why this is the case.
Sophistication
Scammers now use advanced technology and psychological manipulation to trick their victims. They impersonate respected brands and financial institutions, and they can craft highly convincing emails, websites, and phone calls that look indistinguishable from legitimate communications.
Cryptocurrency and new technologies
The rise of digital currencies and decentralised finance (DeFi) platforms has created new opportunities for scammers to exploit. These markets are largely unregulated, making them more vulnerable to exploitation by criminals.
Deepfakes
Scammers are increasingly using deepfake technology to make their fraudulent schemes more convincing and harder to detect. By creating hyperrealistic videos or audio recordings, they can impersonate trusted individuals, such as company executives, colleagues, or even loved ones, to manipulate victims to respond to requests for urgent assistance or money. This manipulation of digital media makes it much more difficult for victims to distinguish between what’s real and what’s fabricated.
Protecting yourself
Despite the growing sophistication of scammers, there are steps you can take to protect yourself. It’s crucial to stay alert and use a combination of scepticism, knowledge, and due diligence when presented with an encounter that seems off.
Be cautious when receiving unsolicited offers or requests, whether by phone, email, or social media. If you weren’t expecting to hear from a company or individual, don’t rush to react. Don’t click on links. Take a step back and verify the legitimacy of the contact by using an email or contact number that you locate online. Always verify account details this way before transferring any money.
Scammers are constantly evolving their tactics, so it’s crucial to stay informed. Regularly educate yourself on the latest scam trends and familiarise yourself with common warning signs. Agencies like Scamwatch provide ongoing updates and resources for identifying and reporting scams.
The evolving nature of financial scams means that it’s not enough to simply be cautious; you need to stay proactive.
Next steps
If you’re unsure whether an opportunity is a scam or simply want a second opinion on a financial matter, your trusted Nexia adviser is here to help. Contact our knowledgeable team today.
All scam statistics in this article were sourced from: https://www.scamwatch.gov.au/research-and-resources/scam-statistics
