In 2023, over 600,000 Australians fell victim to scams, with losses surpassing $2.74 billion. Unfortunately, high-net-worth individuals are increasingly targeted by scammers who present seemingly legitimate investment opportunities or create fake fraud alerts to manipulate them.
The impact of these scams can be devastating. Imagine responding to what appears to be a reputable bank’s advertisement for a high-interest term deposit. The interaction feels authentic—complete with a call from a “banker,” detailed rate summaries, and an official-looking application process. Trusting the process, you transfer a significant sum, only to discover later that the bank portal is inaccessible and your funds are gone. Sadly, in many cases, only a portion of the money can be recovered.
To protect yourself and your wealth, it’s essential to be aware of common financial scams and how to avoid them. Below, we outline five prevalent scams and offer tips on how you can safeguard your finances.
1. Investment and cryptocurrency scams
In 2023, Australians lost $1.3 billion to investment scams. These scams often start with an enticing low-risk, high-return offer that appears too good to pass up. You might begin with a small investment, seeing apparent returns in your portfolio, which encourages you to invest more. However, the fraud often becomes evident when you attempt to withdraw your funds, typically after six months.
Protect yourself: Never respond to unsolicited investment offers or cold calls. Before committing to any investment, verify the company’s licence with ASIC and independently confirm their contact details.
2. Money recovery scams
If you’ve been scammed, your details may be sold on the dark web, leading to further exploitation by money recovery scammers. These criminals promise to recover lost investments for a fee but may escalate to threats or blackmail, worsening the situation.
Protect yourself: Be extremely cautious if you’ve already been scammed. If someone pressures you into a transaction, disconnect immediately. While legitimate fund recovery services do exist, approach them with caution and verify their legitimacy independently.
3. Payment redirection scams
Compromised email accounts with weak passwords can lead to payment redirection scams. Scammers may alter invoices or payment instructions sent via email, redirecting funds into their own accounts. For example, you might receive what appears to be property settlement instructions from your solicitor or an urgent payment request from a known contact.
Protect yourself: Always verify payment instructions by directly contacting a known person, not by using contact details provided in the suspicious email.
4. Remote access scams
You might receive a call from what seems like a trusted organisation—such as a telecom company or even the Australian Federal Police—claiming they need to fix a security issue. They may persuade you to share your screen or download remote access software, allowing the scammer to take control of your device and execute fraudulent transactions.
Protect yourself: Never grant remote access to your device or share login details with any unsolicited caller. It’s akin to giving them the keys to your house.
5. Bank impersonation scams
Some scammers impersonate bank fraud analysts, using fear to trick you into resetting your online banking passwords and authorising transactions. You might believe you’re preventing a fraudulent transaction, not realising you’re actually facilitating one.
Protect yourself: Remember that legitimate banks will never ask you to transfer funds to “protect against fraud,” share secure codes, or download remote access software. Always review what you’re authorising before confirming any action.
Staying safe: Your role in protecting your wealth
Scammers excel at social engineering, creating stories that seem believable, which makes it difficult to detect fraud before it’s too late. By staying informed and vigilant, you can protect yourself from these threats. Regularly discussing these risks and implementing protective measures will help ensure your finances—and your peace of mind—remain secure.
If you ever have doubts or need guidance, don’t hesitate to reach out to your adviser. Your team will help you navigate these challenges and keep your wealth safe.
