Scams target people of all backgrounds, ages and income levels across Australia. There is no one group of people who are more likely to become a victim of a scam. If you think you are 'too clever' to fall for a scam, you may take risks that scammers can take advantage of.
Scams succeed because of two things.
Firstly, a scam looks like the real thing. It appears to meet your need or desire. To find out that it is in fact a scam, you must first make the effort to check it properly. You need to ask questions and think carefully before you decide what to do. Being aware of the dangerous myths below will help you with this. Depending on the issue, you can decide if something is a scam on the spot, or you might need help—and that could take several days.
Secondly, scammers manipulate you by ‘pushing your buttons’ to produce the automatic response they want. It’s nothing to do with you personally, it’s to do with the way individuals in society are wired up emotionally and socially. It’s because the response is automatic that people fall for the scam. To stop scammers manipulating you into their traps, it can be useful to know how to prevent the automatic response they expect.
Some people hold beliefs that leave them even more vulnerable to scams.
One of them is the belief that all companies, businesses and organisations are legitimate and okay because they are all vetted and approved by the government or some other authority. That is not so. Consumer protection agencies can only do so much. While they are constantly on the look-out for dodgy operators, some scams only come to their attention when people report them.
A similar dangerous myth is that internet websites are all legitimate, or that it is difficult to set up a website. It is quite easy and cheap to set up a professional-looking website that is run from outside Australia. A scam website could be used to sell a dodgy product, or it could be easily made to resemble a genuine website, like a bank or credit union website. These websites are often only 'live' for a few days— but that is enough time to trick people into giving up their credit card details or other personal information.
Another belief that makes people vulnerable to scams is the idea that there are short cuts to wealth that only a few people know. Ask yourself the question: if someone knew a secret to instant wealth why would they be spending their time telling everyone, or need to charge people money for it?
As well as exploiting the dangerous myths above, scammers often use psychological triggers to get an automatic response from you without you realising it. Watch out for them next time you're approached, or even next time someone asks you for a favour.
Scammers give you something, such as a 'free' gift or assistance, to get something in return, such as your agreement later on. You are caught up feeling obliged to do something. Protect yourself from those sentiments by recognising the gifts and favours as nothing more than devices to influence you to return the favour.
To get you to agree to what you don't want, scammers may make one outlandish offer, which they know you will reject, so that later they can make one which will not appear so bad in comparison.
Scammer: ‘Okay, you told me you can't do $5000, after I'd already lined up the contract for you. So I've asked my manager for a favour and he authorised me to accept $2000, although we don't normally do that. How do you want to do it, credit card or direct transfer?’
Response: ‘Hold on, $2000 is still out of the question.’
Scammer: ‘As a sign of our appreciation and commitment, we have sent you a small gift. All that we ask is a small fee to cover the freight and insurance costs.’
Response: ‘I thought the gift was free? I do not want you to give me anything that I have to pay for.’
Someone will get you to commit to something early in the piece, and later recall that initial agreement to get you to agree to something further. This ploy can make you feel ill at ease. To protect yourself, you should treat each commitment separately and ask yourself whether, under the circumstances, you would make the same choice as you did earlier. Your instinctive gut-feeling will provide the answer.
Scammer: ‘You did tell me that you wanted to make money, right? And you can see that this proposal can make you money, can't you? So let's get the first instalment organised so that you can get your money.’
Scammer: ‘You said you were interested in working from home. This opportunity allows you to turn your computer into an extra source of income. You could do with some extra money each week, couldn't you?’
Response: ‘What you are offering will not help me get what I want.’
Good looks, similar interests or background, humour and other attractive characteristics are standard tools for the con-artist as well as for honest people who want to generate good rapport with you. If you like someone, you're more likely to go along with what they are suggesting. Your defence is to separate the issue on offer from the person offering it or associated with it.
Scammer: ‘The minute I saw you I knew that you, in particular, had to have this necklace. It's a rare beauty and worn by all the stars. Don't deny yourself this one’.
Scammer: ‘I want to share this opportunity with you because I know that I can trust another member of our community / family / club / church.’
Response: ‘Don't try to flatter me or rush me—I will make my own decision when I am ready to.’
Authority, in or out of uniform, will cause an automatic response in almost everyone. We appeal to and use authority all the time to justify or support our position. Scammers do it deliberately to hoodwink you into agreement. Your protection here is to ask whether the authority is relevant to the context.
Scammer: ‘This new internationally-based investment fund will return well over 20 per cent annually. You see, it's managed by Harvard graduates working for some of the world's top banks.’
Response: ‘So? That's no guarantee of a 20 per cent return!!’
Scammer: ‘Our organisation is registered with the government regulator’
Response: ‘Even if your business is registered, this does not mean that your offer is worthwhile’
The fear of missing out! Being told that this is the last chance or that there are only so few still available, leads most people to agree hastily before they have had the opportunity to think about what they're doing. Some people have found themselves in horrible financial situations because they rushed into agreements or purchases in the fear of missing out. Your protection here is to separate your emotions from your decisions.
Scammer: ‘If you don't act now, you'll miss out on one of the best investment opportunities I've ever seen. You'll kick yourself if you miss out on this. I don't need the sale as there are plenty of people out there trying to get in on this.’
Response: ‘If the offer is so good, it can wait while I get some more advice.’
When we're up against these influence strategies, getting caught up in a scam is not necessarily a reflection of our gullibility or poor judgement. It just shows how good the scammers are at manipulating us. Don't be clouded by influence triggers. Recognise them for what they are, and keep a clear head when making decisions.
* For more information on this subject you could refer to Robert Cialdini's book Influence: the psychology of persuasion ISBN 0688128165. The above information on psychological triggers was drawn from this book.
Scams and identity theft—your personal details are valuable!
Scammers are not just after your money. Scams can also be designed to steal your personal details. The types of personal information that scammers might ask for include credit card and bank account details, passport details and name and address details.
Identity fraud generally refers to the use of a stolen or assumed identity to gain goods, services, money and other benefits, or to avoid obligations. By using your personal details, scammers can sometimes take out loans, claim welfare benefits or run up debts in your name. These activities can damage your credit rating, making it difficult for you to borrow money or get a credit card.
Of course, identity fraud can also cost you money directly (if scammers use a stolen password to take money from your bank account for example). At the very least, setting the record straight after a scammer has misused your identity can be an annoying and time-consuming task.
Apart from scams, identity theft can happen in many ways. Commonly, it may happen if your wallet or purse has been stolen and the thief has used the details on your cards. Or it could happen if someone ‘dumpster dives’ in your rubbish bin, taking your personal details from your discarded mail.