Dodging a bullet: How to avoid online scams
22 Apr 2015
Clever con artists have left a trail of bankrupt, heartbroken retirees in their wake. It’s time to get savvy and outsmart the scammers to keep yourself safe.
Technology has advanced in leaps and bounds over the past few decades and the way its changed doing even the most mundane activities, like banking and shopping for example, is truly astounding.
However, it’s important that you make sure that you keep your private details safe and avoid falling for online scams.
“Anecdotally, seniors are well and truly over-represented in the victims of scams stakes,” says Brian Hay, Detective Superintendent at the Queensland Police Service’s Fraud and Cyber Crime Group.
Hay says retirees have lost millions of dollars in scams, but also suffered serious emotional and psychological distress after being ripped off. It’s important that retirees become aware of the variety of scams and also know how to combat them using vigilance and common sense.
“You have to be sceptical about everything,” says Warren Day, Senior Executive Leader for Assessment & Intelligence at corporate regulator, the Australian Securities and Investments Commission (ASIC).
“If it sounds too good to be true, it probably is.”
After years of working and saving, many retirees have significant assets. That makes them a natural target for scammers. But Day warns that scams target people of all backgrounds, ages and demographics. “Across federal agencies, to the best of our knowledge, most scams work on volume – they target 100 people and one comes off.”
Why seniors?
QPS’s Hay says that when it comes to internet scams, many older Australians haven’t grown up in the digital age. “They can’t discern a legitimate email from a fraudulent email. They’ve also grown up in a culture of trust; deals were done on a handshake.”
Hay says that the retiree lifestyle also makes seniors vulnerable, as they’re usually at home and using their computers more often.
ASIC’s Day says many seniors believe that if it appears on the internet, it’s true. The internet seems complex to them. “It’s so ‘fantastically complex’ that someone who sets up a website must be a legitimate business,” he says.
But Day notes that crooks can put together a flashy, yet fake website for just $300. “It’s not hard to set up a website and company,” he says.
There are four major scams that retirees need to be particularly aware of:
1 Finance scams
Interest rates are low and many retirees are looking for better returns on their savings. That makes them particularly vulnerable to investment scams.
ASIC’s Day says a common scam at the moment is the offer to invest overseas. “There is a great urban myth among older Australians that there are lots of opportunities in the US compared to here,” he says. The crooks ring retirees saying they’re from a US brokerage and promise high returns.
QPS’s Hay says local scammers may send a nice glossy brochure promising high-yielding returns guaranteed for 12 months.
Hay advises retirees contemplating taking up any investment opportunity to get legal and financial accounting advice. “See an accountant, not just a financial planner,” he says. “And tread very carefully.”
Check ASIC’s website to see if investment and scheme promoters hold an Australian Financial Services (AFS) licence. If they don’t, Day says don’t deal with them and don’t believe their excuses for not being licensed.
2 Dating and romance scams
The scams that lure most seniors are dating and romance scams. Many retirees are either widowed or have split from their partners. Scammers create fake profiles on online dating sites and appeal to retirees’ need for an emotional connection. Once a bond is established, they start asking for gifts and money.
“If they [retirees] are looking for companionship, they’re emotionally vulnerable,” Hay says. “If you’re going to seek an online relationship, keep it local. Overseas connections with a romance angle are likely to be with a scammer.”
Hay says that under no circumstances should seniors send money or give out credit card details.
3. Physical scams
With retirees at home, they’re also increasingly targeted by ‘driveway’ scams: a scammer knocks on their door offering a trade service, such as paving or roofing. The scammers gain access to the house to case it for a future robbery, or they seek upfront payment for the service then disappear without delivering it.
Hay says that if you need something fixed and repaired, contact a trusted, local tradesperson.
“If anyone knocks on your door offering trade services, just turn them away, pure and simple.”
4. Phishing emails
There are a range of email scams, but Hay says that the scammers are seeking an emotional response from you – fear or excitement. They tell you you’ve won something, or they warn that you owe money. Their goal is to get you to hand over personal or account details.
Hay warns they often seem to be from a well-known, trusted Australian brand, such as a bank or phone company. He says to treat every email as a potential scam.
What are the telltale signs of a scam? Hay says the emails may not be addressed to you personally, but ‘dear member, client or customer’. They also embed a link in the email. “Never click on a hyperlink in an email,” he warns.
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