What are the types of scams, and How to avoid them

The best way to avoid scams is by being vigilant. Scammers try to catch people off guard so they can take advantage of them. In this article, you'll learn about the common types of scams and how best to avoid them.

Phishing scams

This scam involves cybercriminals sending consumers emails or text messages posing as well-known or established sources, such as internet service providers, banking institutions, mortgage lenders, and the like.

Using emails or text messages, cyber criminals will try to trick you into giving your passwords, online banking information, credit card details, or other sensitive information they can use to do fraudulent activities. With your information, they could gain access to your device, steal money from your account, or use your email to send phishing emails to your contacts.

How to avoid phishing scams: Always look at the sender details of the email or text message. If the email domain or phone number is from an unrecognised source, it's likely a phishing scam attempt. Email addresses that have unusual characters or numbers, or are misspelled, are also telltale signs of phishing.

Generally, it's best to be wary of emails or text messages asking you for your PIN or OTP (one-time password). If you're unsure about an email or message, call your provider to verify the correspondence.

Romance scams

Romance scams happen when someone assumes a fake identity to build an online relationship with you in order to get money. These scammers will work for months to create a romantic relationship with you, making it feel as real as possible and then manipulate you, asking for money to pay for medical expenses, pay for a ticket to see you, or even get you to invest in cryptocurrency.

How to avoid online dating and romance scams: Be wary of people online who aren't open to video calls or in-person meetings, as they could be romance scammers. When someone pressures you into giving them money, it's best not to engage and cease contact with them.

Investment scams

Scammers will call you posing as a financial adviser offering incredible opportunities with great returns that sound too good to be true. In some cases, you could also receive text messages or emails that may look real at first glance, complete with believable marketing materials.

Often, these scams will ask for a sizable investment but promise that they will you will get double or triple that in a short amount of time. Unfortunately, some people who fall for investment scams give up their life savings to an investment scheme that was never real in the first place.

How to avoid investment scams: Be cautious of financial advisers who call you out of nowhere, telling you about an investment that is 'risk-free' and has 'guaranteed returns'.

Ensure the legitimacy of the financial adviser by asking for their Australian Securities and Investments Commission (ASIC) or their Australian Financial Services (AFS) licence.

Invoice fraud and billing scams

This involves a scammer pretending to be a legitimate business, sending you a fake invoice or billing charges. In these cases, the goal of the scammer is to trick you into paying them instead of the real business or company.

There are a few ways that people can fall for invoice fraud and billing scams, such as:

• A scammer could get a hold of your personal or work email and intercept a real invoice and modify it, changing the payment details.

• A scammer sends you an invoice for something that you didn't buy.

• A business may overcharge you for a product or service. There are times when some businesses deliberately charge you more than the original, agreed-upon quote.

How to avoid invoice fraud and billing scams: The email looks different or doesn't match other correspondence from the business. The payment details have changed from previous times you've paid. Or you're suddenly being charged for something you never bought or signed up for.

Job and employment scams

A job scam happens when you're offered an employment opportunity, often through email, SMS, or an encrypted message service like WhatsApp or Facebook Messenger, that has suspiciously high wages or quick and easy money for work that requires little to no effort. Employment scammers offer this incredible job opportunity, hoping that you'll believe them and do whatever they say to secure the offer.

With these scams, the recruiter requires you to give them money or gain access to your banking details before you can move forward with your application. There are also times when they ask for private information so they can use it for fraud.

How to avoid job and employment scams: No genuine employer would require future employees to pay any kind of onboarding, recruitment, or training fee so they could continue with the job. If you're asked to pay upfront or create a cryptocurrency account for company funds, it could be a scam, and it's best to cease communications and report the account.

Unexpected money scams

This type of scam can happen over the phone where someone pretends to be a lawyer telling you that you've been gifted a generous some by a long-lost relative. It can also appear as a text message or email congratulating you on winning a monetary prize or someone from the Australian Tax Office (ATO) telling you about a tax refund, or otherwise telling you that you're entitled to some money.

The catch is that if you want to receive the inheritance, winnings, or tax refund, you need to give the scammer money to pay a fee to cover legal costs.

How to avoid unexpected money scams: When getting messages or calls about receiving unexpected money, always err on the side of caution and practice a healthy dose of scepticism. Don't click on any links sent by someone you don't know. Any reward or tax refund that requires you to pay money up front is likely fraudulent.

Threats and extortion scams

When scammers use threatening tactics to scare you into giving them money, that's classified as a threat and extortion scam. The goal of the scammer is to scare you enough into thinking that their threats are legitimate and sending them money is the only way to prevent harm.

These scams usually target vulnerable people such as the elderly or immigrants, threatening their lives or with arrests or deportation. Scammers usually pretend to be officials from government agencies like the police or the Department of Home Affairs. There are also times when scammers say they're from the ATO, and if you don't pay outstanding fees, you'll be arrested.

How to avoid threats and extortion scams: If you're getting threatening phone calls or emails, don't respond. Instead, report it to the appropriate authorities. By not engaging, you're lessening the chances of the scammers escalating their tactics. To verify the identity of the caller or sender, go directly to the concerned agency.

Keeping yourself safe from scams

By being aware of the different kinds of scams, you'll have an easier time identifying whether someone might be trying to trick you out of your hard-earned cash or use your information in nefarious ways.

When you do encounter a scam, it's best to report it to ScamWatch, run by the National Anti-Scam Centre. If you've already been a victim of a scam or cybercrime, you could make a police report. For those whose credit information has been compromised, contact your credit provider immediately to protect your account and stop any transactions.