Anyone can be scammed. Intelligence, education, technical expertise and life experience don’t protect any of us from sophisticated scammers who use proven psychological techniques to manipulate their targets.
Understanding why everyone is vulnerable to scams
Scammers use emotional manipulation tactics
Scammers study their targets and use their personal circumstances to manipulate them.
- Need for connection. Romance scammers provide constant attention and companionship.
- Desire to build wealth. Investment scams promise unrealistic returns with little risk.
- Worry about consequences. Scammers can threaten you with punishment or create urgency so that you don’t have time for careful consideration.
- Compassion. Fake charity or emergency scams use your desire to help others.
Scammers target specific vulnerabilities
Some scammers study their targets and use specific vulnerabilities such as:
- recent life changes like divorce, grief, or retirement
- financial stress or desire for more income
- social isolation or limited family support
- health concerns or medication that affects judgment
- limited technology experience making online scams harder to spot
- limited experience about Australian Government and business practices.
How we think affects all of our decisions
Everyone’s brain uses shortcuts that scammers exploit.
- Commitment escalation: Once you’ve invested time or money, it’s hard to walk away
- Confirmation bias: You notice evidence that supports what you want to believe
- Authority bias: You trust people who seem to be experts or officials
- Social proof: Fake testimonials and reviews seem convincing
- Reciprocity: Small gifts or favours make you feel obligated to respond.
Advanced technology making scams more convincing
Modern scams use sophisticated tools and artificial intelligence including:
- deepfake technology creating realistic photos and videos
- voice cloning for phone scams
- professional looking websites and documentation
- social media data used to personalise approaches
- cryptocurrency making money transfers harder to trace.
Understanding why victims resist help
Understanding why your loved one might reject your concerns can help you approach the situation with more patience and empathy.
Victims often resist help because they feel embarrassed and ashamed, fearing they’ll be judged as gullible by family and friends. They may genuinely believe in the relationship or opportunity, especially when sophisticated scammers provide convincing evidence and a real emotional attachment develops.
For example, ‘love bombing’ is a technique used by relationship scammers to bombard a person with regular affectionate messages. This can trigger an intense dopamine and endorphin rush which creates a sense of connection and obligation toward the scammer. These positive feelings outweigh the victims' ‘voice of doubt’.
The ‘sunk cost fallacy’ also plays a powerful role. Victims feel they’ve already invested so much time, emotion and money, that walking away now would mean losing everything.
The sense of fear and urgency used by scammers can also trigger our natural ‘fight or flight’ response which overrides our logical thought and reason. This is sometimes referred to as an ‘Amygdala Hijack’.
Finally, there’s often an underlying fear that admitting to being scammed will result in family members taking control of their finances or treating them as incapable of making decisions. These psychological barriers are normal responses to manipulation, not character flaws or signs of weakness.
Helpful video resources
Investment scams educational video
Investment scams are making headlines, and yes, they're the ones Australians are losing the most money to.
The tricky part, they sound really appealing, and they're seriously hard to spot.
So let's break down what's really going on.
Our friend, Tony, here is taking time out, when he scrolls across the opportunity to make a lot of money with very little risk.
You need to be careful, Tony. Don't risk your life savings, no matter how genuine the offer looks.
Investment scammers use sophisticated tactics, like using AI, to produce fake ads, or news articles, with known financial experts, legitimate companies, or even celebrities.
They also have professional-looking websites, and online trading platforms that look like the real deal. And they pressure you to act fast, so they can steal your money before you have the chance to become suspicious.
When you invest with them, they show you fake data to prove your investments are growing.
They can also build your trust by letting you make small withdrawals, but when you try to withdraw all your funds, they come up with reasons not to pay you, and you lose your money.
There are red flags to look out for.
Before you make an investment, take a moment to stop and ask yourself these questions.
Does the opportunity sound too good to be true?
Have you received emails, testimonials, or ads with promises of over-the-top big returns?
Does a scheme have a celebrity endorsement?
If you see any of these red flags, it's a sign that the scammer is out to rob you of your savings.
Slow down, Tony. It's important to never enter into any sort of investment scheme in a hurry.
Check who you're dealing with.
You can check by getting independent legal advice or financial advice from a financial advisor registered with ASIC.
That's the Australian Securities and Investment Commission.
You can check whether the company or website you are dealing with is named on the Moneysmart Investor Alert List. If they are, it's a scam.
You can check that the address and contact details of the company you are in contact with are correct on publicly listed directories. If they're not, it's a scam.
If the offer you've had to buy shares is well below market value, it's probably a scam.
And if you're told the shares are being released pre-initial public offering, be even more cautious.
Scammers can impersonate real Australian financial service licence holders, so it's important to check that they're the correct holder of the licence.
Do this by reviewing the Financial Advisors Register, and the Authorised Representatives Register.
Call the organisation on the number you find independently to verify your contact, and that the offer is real.
And if, like Tony, you find the scammers are pressuring you to act fast, back off. Remember, scammers are skilled at convincing you that the investment is real, the returns are high, and the risks are low.
And finally, it's important to protect yourself.
Really good work, Tony. That company is on the alert list. It's a scam.
If you've been the target of a scam, call your bank immediately to stop any further losses.
Cut all contact with the fake company, and be on the lookout for anyone offering to help you get your money back. They're usually just another scam.
And report the scam to Scamwatch.
Your report will help us to protect others.
[End of transcript]
Dating and romance scams educational video
In the world we live in, scams have become commonplace, even in online relationships.
So it's important we talk about romance scammers who build a romance or friendship with you online.
They win your trust, but it's all just an attempt to manipulate you and get your money.
Let's take Lucy here. The person she believes she's in an online relationship with has spent months getting to know her, so she believes the relationship is real.
It's easy for people to hide their true identity online and manipulate the trust and feelings of their victim.
That's why Lucy is actually considering this request for money from someone she's only met online, but it should be a red flag.
Beware if you're asked to transfer money like this or set up accounts for someone else.
They might be trying to steal your money or involve you in money laundering.
And beware if they ask you to invest in cryptocurrency or another investment opportunity.
What's happening here to Lucy are common signs of a scam, and there are other clues that the person you're speaking to has ulterior motives, such as they try to move your chat to a platform that can't be accessed or traced by law enforcement.
Perhaps their online profile doesn't match what they tell you, or they avoid meeting you in person as something always comes up.
They will have a lot of excuses.
Or they ask you for personal photos or information that could then be used against you.
The golden rule is never ever send money card or bank details, and never agree to transfer money on someone else's behalf before checking.
You can check online for information about them, but remember scammers can use fake photos, videos, and even websites.
Check their profile. It might be fake if there's very little personal information about them on there, or there are a few or no connections on their social media accounts.
Do an internet search with their name and the word scam.
Speak to a trusted friend or family member about the online relationship like Lucy's doing. They might see signs that you don't.
Well done, Lucy.
And finally, if you've been scammed, protect yourself from further harm.
Act quickly.
If you've shared personal details or transferred money, call your bank immediately to stop any further losses.
Change passwords on all devices and online accounts.
If you're experiencing emotional distress, please call, text, or chat with Lifeline.
And cut all contact with the person and report scams to Scamwatch. Your report will help us to protect others.
And share your story. The more we talk, the less power scammers have.
See also
You can play a vital role in protecting your loved one from harm if they are involved in a scam. Find out how.
Check these common signs and behaviours if you are worried that someone you care about is being scammed.
'Starter guides' to support conversations with loved ones who may be under the influence of a scammer.