Watch out! Scammers stealing millions of dollars from Australians

Last year was scarily lucrative for online scammers. According to Scamwatch, Australians lost a record-breaking $323 million in 2021 alone, with more than quarter-million reports filed describing different investment, romance, and shopping scams. 

Even more bad news: the trend seems to be getting worse. 

Cybersecurity company Proofpoint reports that losses due to scams spiked by more than 50% in January 2022 compared to the same time last year. Over the course of a single month, more than $34 million dollars went down the drain.

Senior Director at Proofpoint Adrian Covich comments, “With scammers and cybercriminals continuously reinventing their tactics [...], there is every chance we will see these statistics continue to rise this year.”

So what kind of scams should Australians watch out for, and how can you safeguard yourself against them?

Due to the current ubiquity of the internet, most scams these days are digital in nature. Online scammers extort vulnerable populations for money or materials by making fraudulent emails, text messages, or phone calls under some pretext. 

The most prevalent kinds of online scams are investment, romance, gambling, phishing, identity theft, and extortion scams.

Investment scams are the most financially damaging to Australians of all, costing more than $177 million in 2021 alone according to data from Scamwatch. They seem to be growing in popularity, too, as Australians lost $21 million to investment scams in January 2022 – more than double that of the same time last year. Those who got scammed make up a hefty portion of the nearly 1 in 5 Australians losing money to bad investments.

Typically, investment scammers will reach out via email or phone call, claiming to have an investment opportunity that promises big returns for little to no risk. Victims trying to ‘cash in’ on a seemingly urgent, golden opportunity instead find themselves cheated out of their hard-earned cash.

New forms of the classic investment scam include fake cryptocurrency accounts, sports betting apps, online dating profiles, superannuation funds, and investment seminars. 

These scam tactics will usually come with a few red flags: 

• Contacting you out of the blue with exciting, low/no risk investment opportunities.
  

• Deploying high-pressure messaging (“invest now or else!”).
  

• Not having valid ASIC credentials.
  

Cryptocurrency scams can be particularly dangerous, since scammers are very much aware that these kinds of investments carry fewer legal protections than traditional ones. Scammers might also claim to have a celebrity endorsement for their product, but this should always be treated with a high degree of suspicion.

Investment scams usually have a ‘too good to be true’ vibe, so it’s important to only seek financial advice from registered professionals. You can always check if a company or individual is legit by searching for them in ASIC's database.

The second most damaging scams are romance scams – also known as “catfishing”. These scams conned Australians out of $5.2 million in January alone, often by targeting (typically elderly) Australians seeking romantic relationships through online dating apps/websites or social media. 

Romance scammers will reach out through established online dating platforms and shower the victim with attention and praise. They may even take months or years to build trust and intimacy before asking (either subtly or directly) for gifts, personal information, or financial support – spamming victims with increasingly desperate messages if they don’t comply. 

You can usually spot online dating scams by their poorly written or vague messages, sudden professions of love, and attempts to move communication away from a dating website to chats or emails. Scammer profiles tend to be inconsistent with what they claim in their messages, as well.

You can take a few simple steps to keep yourself safe from romance scams by:

• Never travelling overseas to meet someone you’ve never met (consider the advice on Smartraveller before making any decisions).
  

• Being wary of requests for gifts, money, or personal financial details, especially from people you don’t know or trust.
  

• Never transferring money for someone else, as this could be attempted money laundering (which is a criminal offence). 
  

This can be especially upsetting for underprivileged groups, such as LGBTQIAP+ members, people of colour, or those with disabilities, who already face added difficulty and safety concerns when it comes to online dating. The Australian government has set up an online safety resource guide for diverse groups to help keep people safe. 

You can check out our in-depth guide on avoiding romantic scammers for more information.

The explosive popularity of online shopping during the pandemic has led to a similar surge in online retail scams. Research from Mastercard found that 3 out of 5 Australians purchased from an unfamiliar website or business after lockdowns began, which leaves their personal information vulnerable to scammers and hackers. 

In fact, the amount of money lost to hacking scams more than doubled in January, while phishing scams (where scammers attempt to trick you into giving away personal information with fake websites) were up more than 50% from December 2021. These methods are easy pathways for scammers to commit serious and life-altering identity theft, highlighting a massive digital vulnerability among ordinary Australians.

You can secure your digital identity and personal information when shopping online by employing a few recommended cybersecurity protections.

We can thank COVID-19 for the spike in online scams. According to the ACCC, working from home and economic uncertainty have created ideal conditions for cybercriminals to take advantage of distressed Australians. 

For example, lockdown gives romance scammers the perfect pretext to avoid meeting people in person. Worsening loneliness, mental health, and financial stress have also deepened emotional vulnerabilities in many Australians, which scammers exploit for their own destructive ends. After all, if you’re like the many Australians hoping to boost their savings right now, a ‘get-rich-quick’ scheme from a secret investment scammer might seem more tempting than usual.

“Our advice for people both in their personal lives and the workplace is to always err on the side of caution,” says Proofpoint’s Adrian Covitch. “Anything that looks or sounds too good to be true most usually is.”

For the latest updates on scams to watch out for, you can subscribe to Scamwatch’s mailing list. In the meanwhile, we’ve written a new guide on how to boost your savings safely.