How to spot a financial scam

Australians need to be more vigilant than ever as fraudsters unleash a range of new tactics.

Financial scams are on the rise. Two thirds of Australians aged 15 years and over were exposed to a scam in 2021-22 – about 10 percentage points higher than previously – according to ABS data . 

Scams come in all shapes and sizes, including over the phone, text message, and email.

“Many of us have been exposed to, or sadly been conned by some of these scammers – people phoning and pretending to represent well known charities, companies, or banks,” says Susan Bonnici, Estate Planning Solicitor at Equity Trustees.

“Then there are the myriad emails replicating organisations you’re familiar with, seeking your personal information or providing dangerous but disguised links to malware which then hack into financial details stored on your computer.”

Tackling the sophisticated fraudster

Phishing is a common scam where cyber-criminals trick people into handing over their personal information. They send fraudulent emails or text messages which appear to be from a trusted organisation requesting payment.

One of the most important clues about this scam is a request to change bank details. Another clue is that the tone of these requests is usually urgent, as if the person is frustrated and needs the task done at once. 

“This creation of stress and anxiety on the individual responsible for making the payment, can tempt less vigilance,” Bonnici says.

Dealing with family fraudsters

Sometimes fraudsters are known to the target. Elder financial abuse, where someone takes or misuses money or assets without permission, is often perpetuated by the victim’s children or carers.

Bonnici cites an example of a man who had been estranged from his elderly father. The father then suffered a health event, which opened the door for the son’s return.

“The son took his father to the bank and attempted to close an account with hundreds of thousands of dollars in it. We, as the external trustee company, reminded the bank about an independent enduring power of attorney which was in place and put a stop to the father being potentially defrauded by his own son.”

There are also lower-level examples of elder abuse, such as adult children demanding their elderly parents pay unreasonable amounts to cover the travel costs they incur while visiting them. 

“What these family members don’t understand is that it’s not just fraud but also theft, and a form of elder abuse by taking advantage of someone in a virtually powerless position.”

Watch out for others and consider professional help

While the number of scam attempts are on the rise, people are becoming better at recognising them. ABS data shows that 2.7 per cent of Australians responded to a scam in 2021-22, down from 3.6 per cent in 2020-21.

However, anyone can fall prey to their increasingly sophisticated tactics, especially vulnerable or elderly people. It’s up to all of us to continue look out for scammers.