Technology Training

All about scams

This information is courtesy of the ScamWatch Website. Please click here for more information such as statistics and how to protect yourself from scams.

Types of Scams

Attempts to gain your personal information

Scammers use all kinds of sneaky approaches to steal your personal details. Once obtained, they can use your identity to commit fraudulent activities such as using your credit card or opening a bank account.

Buying or selling

Scammers prey on consumers and businesses that are buying or selling products and services. Not every transaction is legitimate.

 

Classified scams  

Classified scams trick online shoppers on classified websites into thinking they are dealing with a legitimate contact but it is actually a scammer.

False billing

False billing scams request you or your business to pay fake invoices for directory listings, advertising, domain name renewals or office supplies that you did not order.

 

 

Health & medical products

Health and medical product scams may sell you healthcare products at low prices that you never receive, or make false promises about their ‘cure-all’ products, medicines and treatments.

Mobile premium services

Scammers create SMS competitions or trivia scams to trick you into paying extremely high call or text rates when replying to an unsolicited text message on your mobile or smart phone.

Online shopping scams

Online shopping scams involve scammers pretending to be legitimate online sellers, either with a fake website or a fake ad on a genuine retailer site.

 

Overpayment scams

Overpayment scams work by getting you to ‘refund’ a scammer who has sent you too much money for an item you are selling.

 

 

Psychic & clairvoyant

Psychic and clairvoyant scams are designed to trick you into giving away your money, usually offering ‘help’ in exchange for a fee.

 

 

Dating & romance

Scammers take advantage of people looking for romantic partners, often via dating websites, apps or social media by pretending to be prospective companions. They play on emotional triggers to get you to provide money, gifts or personal details.

Scammers take advantage of people looking for romantic partners, often via dating websites, apps or social media by pretending to be prospective companions. They play on emotional triggers to get you to provide money, gifts or personal details.

 

How this scam works

Dating and romance scams often take place through online dating websites, but scammers may also use social media or email to make contact. They have even been known to telephone their victims as a first introduction. These scams are also known as ‘catfishing’.

Scammers typically create fake online profiles designed to  lure you in. They may use a fictional name, or falsely take on the identities of real, trusted people such as military personnel, aid workers or professionals working abroad.

Dating and romance scammers will express strong emotions for you in a relatively short period of time, and will suggest you move the relationship away from the website to a more private channel, such as phone, email or instant messaging. They often claim to be from Australia or another western country, but travelling or working overseas.

Scammers will go to great lengths to gain your interest and trust, such as showering you with loving words, sharing ‘personal information’ and even sending you gifts. They may take months to build what may feel like the romance of a lifetime and may even pretend to book flights to visit you, but never actually come.

Once they have gained your trust and your defences are down, they will ask you (either subtly or directly) for money, gifts or your banking/credit card details. They may also ask you to send pictures or videos of yourself, possibly of an intimate nature.

Often the scammer will pretend to need the money for some sort of personal emergency. For example, they may claim to have a severely ill family member who requires immediate medical attention such as an expensive operation, or they may claim financial hardship due to an unfortunate run of bad luck such as a failed business or mugging in the street.  The scammer may also claim they want to travel to visit you, but cannot afford it unless you are able to lend them money to cover flights or other travel expenses.

Sometimes the scammer will send you valuable items such as laptop computers and mobile phones, and ask you to resend them somewhere. They will invent some reason why they need you to send the goods but this is just a way for them to cover up their criminal activity.  Alternatively they may ask you to buy the goods yourself and send them somewhere. You might even be asked to accept money into your bank account and then transfer it to someone else.

Sometimes the scammer will tell you about a large amount of money or gold they need to transfer out of their country, and offer you a share of it. They will tell you they need your money to cover administrative fees or taxes.

Dating and romance scammers can also pose a risk to your personal safety as they are often part of international criminal networks. Scammers may attempt to lure their victims overseas, putting you in dangerous situations that can have tragic consequences.

Regardless of how you are scammed, you could end up losing a lot of money. Online dating and romance scams cheat Australians out of millions every year. The money you send to scammers is almost always impossible to recover and, in addition, you may feel long-lasting emotional betrayal at the hands of someone you thought loved you.

Fake charities

Scammers impersonate genuine charities and ask for donations or contact you claiming to collect money after natural disasters or major events.

Scammers impersonate genuine charities and ask for donations or contact you claiming to collect money after natural disasters or major events.

How this scam works

Fake charities try to take advantage of your generosity and compassion for others in need. Scammers will steal your money by posing as a genuine charity. Not only do these scams cost you money, they also divert much needed donations away from legitimate charities and causes.

Fake charity approaches occur all year round and often take the form of a response to real disasters or emergencies, such as floods, cyclones, earthquakes and bushfires.

Scammers will pose as either agents of legitimate well-known charities or create their own charity name. This can include charities that conduct medical research or support disease sufferers and their families. They may also pose as individuals needing donations for health or other reasons.

Scammers may also play on your emotions by claiming to help children who are ill.

Fake charities operate in a number of different ways. You may be approached on the street or at your front door by people collecting money. Scammers may also set up fake websites which look similar to those operated by real charities. Some scammers will call or email you requesting a donation.

Warning signs

  • You’ve never heard of the charity before, or it is well-known but you suspect the website, email or letter may be fake. A fake website may look almost identical to a legitimate charity site, changing only the details of where to send donations.
  • The person collecting donations on behalf of the charity does not have any identification. Remember, even if they do have identification, it could be forged or meaningless.
  • You are put under pressure or made to feel guilty or selfish if you don’t want to donate.
  • You are asked to provide a cash donation as they don’t accept cheques. Or, they want the cheque to be made out to them rather than to the charity.
  • You are not given a receipt. Or, they give you a receipt that does not have the charity’s details on it.

Protect yourself

  • Approach charity organisations directly to make a donation or offer support.
  • Check the organisation’s name and look them up. Check the website address to make sure it’s the same as what you searched for.
  • Legitimate charities are registered – you check an organisation’s credentials on the Australian Charities and Not-for-Profits Commission (ACNC) website to see if they are a genuine charity.
  • Never send money or give personal information, credit card details or online account details to anyone you don’t know or trust.
  • If you are approached by a street collector, ask to see their identification. If you have any doubts about who they are, do not pay.
  • If you are approached in person, ask the collector for details about the charity such as its full name, address and how the proceeds will be used. If they become defensive and cannot answer your questions, close the door.
  • Avoid any arrangement with a stranger that asks for up-front payment via money order, wire transfer, international funds transfer, pre-loaded card or electronic currency, like Bitcoin. It is rare to recover money sent this way.

 

Investments

If you are looking for a fast way to make money, watch out – scammers have invented all sorts of fake money-making opportunities to prey on your enthusiasm and get hold of your cash.

Betting & sports investment scams

Betting and sports investment scams try to convince you to invest in foolproof systems and software that can ‘guarantee’ a profit on sporting events.

Common examples of sports investment scams

These scams are simply a form of gambling camouflaged as legitimate investments. Most of the schemes or programs do not work as promised and buyers cannot get their money back. In many cases the supplier simply disappears.

Computer prediction software

The scammer will try to sell you a software program that promises to accurately predict sporting results, usually of team sports or horse racing. They will promise high returns or profits as a result of the program’s use.

Team sports betting programs claim to identify opportunities based on historical trends and the different odds offered by various bookmakers. Horse racing software will often claim that predictions are based on weather conditions, the state of the horse, the draw, or the condition of the jockey. They may also claim to track the money that has been placed on a race by professional betters.

Often the information used in these programs can be obtained from the betting pages of your local newspaper at very little cost.

Betting syndicates

The scammer will try and convince you to become a member of a betting syndicate. You will need to pay a compulsory fee (often in excess of $15 000) to join and open a sports betting account. You will be required to make ongoing deposits to maintain the balance of the account.

The scammer tells you that they will use funds in the account to place bets on behalf of the syndicate. You, and other ‘syndicate members’ are promised a percentage of the profits.

Sports investment

The scammer targets small business operators, professionals, retirees or others with funds to ‘invest’. These schemes are usually promoted as business opportunities or investments at trade fairs, shows or via the internet. People may also be contacted via an unsolicited phone call, email or letter.

The scammer will use technical or financial terms such as ‘sports arbitrage’,’ sports betting’, ‘sports wagering’, ‘sports tipping’ or ‘sports trading’ to make these scams look like legitimate investments. Promotional material often takes the form of glossy and sophisticated brochures or websites that contain graphs or diagrams promising large returns for little or no effort.

The scammer may also claim that their company is registered with the Australian Securities and Investments Commission (ASIC).

Warning signs

  • You approached to invest in a money-making opportunity that promises huge returns and risk-free profits.
  • The sales pitch is accompanied by glossy promotional material showing extraordinary returns.
  • The seller uses financial or technical terms to try and sell their product or scheme.
  • You are told places are strictly limited and you need to buy now in order to secure the software package, or your spot in the scheme.
  • You are frequently called by salespeople trying to pressure you into buying the product or joining the scheme.

Protect yourself

  • If you receive a call from someone trying to sell you a sports investment opportunity or prediction software – just hang up.
  • Be wary of high pressure and slick sales tactics, such as reports on past performance and graphs showing high returns.
  • Do not let anyone pressure you into making decisions about money or investments – get independent legal or financial advice.
  • Conduct an independent check on the company selling the scheme or service – often their postal address will turn out to be a car park and no real office exists.
  • Look out for any ongoing costs associated with the scheme or system.
  • Make sure you know how to cancel any subscription service that you sign up to.

Investment scams

Investment schemes involve getting you or your business to part with money on the promise of a questionable financial opportunity.

Common types of investment scams

Investment cold calls

A scammer claiming to be a stock broker or portfolio manager calls you and offers financial or investments advice. They will claim what they are offering is low-risk and will provide you with quick and high returns, or encourage you to invest in overseas companies. The scammer’s offer will sound legitimate and they may have resources to back up their claims.  They will be persistent, and may keep calling you back.

The scammer may claim that they do not need an Australian Financial Services licence, or that that they are approved by a real government regulator or affiliated with a genuine company.

The investments offered in these type of cold calls are usually share, mortgage, or real estate high-return schemes, options trading or foreign currency trading. The scammer is operating from overseas, and will not have an Australian Financial Services licence.

Share promotions and hot tips

The scammer encourages you to buy shares in a company that they predict is about to increase in value. You may be contacted by email or the message will be posted in a forum. The message will seem like an inside tip and stress that you need to act quickly. The scammer is trying to boost the price of stock so they can sell shares they have already bought, and make a huge profit. The share value will then go down dramatically.

If you invest you will be left with large losses or shares that are virtually worthless.

Investment seminars

Investment seminars are promoted by promising motivational speakers, investment experts, or self-made millionaires who will give you expert advice on investing.  They are designed to convince you into following high risk investment strategies such as borrowing large sums of money to buy property, or investments that involve lending money on a no security basis or other risky terms.

Promoters make money by charging you an attendance fee, selling overpriced reports or books, and by selling investments and property without letting you get independent advice. The investments on offer are generally overvalued and you may end up having to pay fees and commissions that the promoters did not tell you about. High pressure sales tactics or false and misleading claims are often used to pressure you into investing, such as guaranteed rent or discounts for buying off the plan.

If you invest there is a high chance you will lose money.

Visit ASIC’s MoneySmart for more information about investment seminar scams.

Superannuation

Superannuation scams offer to give you early access to your super fund, often through a self-managed super fund or for a fee. The offer may come from a financial adviser, or a scammer posing as one.  The scammer may ask you to agree to a story to ensure the early release of your money and then, acting as your financial adviser, they will deceive your superannuation company into paying out your super benefits directly to them.  Once they have your money, the scammer may take large ‘fees’ out of the released fund or leave you with nothing at all.

You cannot legally access the preserved part of your super until you are between 55 and 60, depending what year you were born. There are certain exceptions such as severe financial hardship or compassionate grounds – but anyone who otherwise offers early access to your super is acting illegally.

Visit ASIC’s MoneySmart for more information about how super works.

Warning signs

  • You receive a call, or repeated calls, from someone offering unsolicited advice on investments. They may try to keep you on the phone for a long time, or try and transfer you to a more senior person. You are told that you need to act quickly and invest or you will miss out.
  • You receive an email from a stranger offering advice on the share price of a particular company. It may not be addressed to you personally, and may even give the impression it was sent to you by mistake.
  • An advertisement or seminar makes claims such as ‘risk-free investment’, ‘be a millionaire in three years’, or ‘get-rich quick’.
  • You are invited to attend a free seminar, but there are high fees to attend any further sessions. The scammer, posing as the promoter, may offer you a loan  to cover both the cost of your attendance at the additional seminars and investments.
  • You see an advertisement promising a quick and easy way to ‘unlock’ your superannuation early.

 

Jobs & employment

Jobs and employment scams trick you into handing over your money by offering you a ‘guaranteed’ way to make fast money or a high-paying job for little effort.

How does this scam work?

The scammer contacts you by email, letter or phone and offers you a job that requires very little effort for high returns, or a guaranteed way to make money quickly.  You may even come across false job opportunities on classified ad websites.

The job on offer may require you to do something simple such as stuffing envelopes or assembling a product using materials that you have to buy from the ‘employer’.  To accept the job you will be asked to pay for a starter kit or materials relevant to the job or scheme.

If you pay the fee you may not receive anything or what you do receive is not what you expected or were promised. For example, instead of a ‘business plan’, you may be sent instructions for how to get other people to join the same scheme.

On completion of your work, the scammer will refuse to pay you for some or all of your work, using excuses such as the work not being up to the required standard.

Another type of job opportunity scam asks you to use your bank account to receive and pass on payments for a foreign company. The scammers promise you a percentage commission for each payment you pass on. This is likely to be a form of money laundering which is a criminal offence.

If you provide your account details the scammer may use them to steal your money or commit other fraudulent activities.

Warning signs

  • You come across an advertisement or receive an email, letter or phone call offering you a guaranteed income or job.
  • The message may claim lots of money can be made with little effort using your personal computer, or guarantee large returns.
  • The message is not addressed to you personally.
  • The message asks you to provide personal details or a fee for more information about the job or start-up materials.
  • The message does not have a street address, only a post office box or an email address.
  • You are asked to transfer money on behalf of someone else, which may be money laundering.

Pyramid schemes

Pyramid schemes are illegal and very risky ‘get-rich-quick’ schemes that can end up costing you a lot of money.

How does this scam work?

You may hear about a pyramid scheme from friends, family or neighbours. Usually, pyramid schemes recruit members at seminars, home meetings, over the phone, by email, post or social media.

In a typical pyramid scheme, you pay to join. The scheme relies on you convincing other people to join up and to part with their money as well. In order for everyone in the scheme to make a profit there needs to be an endless supply of new members. In reality, the number of people willing to join the scheme, and therefore the amount of money coming into the scheme, will dry up very quickly.

Some pyramid scheme promoters disguise their true purpose by introducing products that are overpriced, of poor quality, difficult to sell or of little value. Making money out of recruitment is still their main aim.

The promoters at the top of the pyramid make their money by having people join the scheme. They pocket the fees and other payments made by those who join under them. When the scheme collapses, relationships, friendships and even marriages can be damaged over money lost in the scam.

It is against the law to promote or participate in a pyramid scheme.

Warning signs

  • You are offered a chance to join a group, scheme, program or team where you need to recruit new members to make money.
  • The scheme involves offering goods or services of little or doubtful value that serve only to promote the scheme, such as information sheets.
  • There are big up-front costs.
  • The promoter makes claims like ‘this is not a pyramid scheme’ or ‘this is totally legal’.

 

Threats & extortion

Scammers will use any means possible to steal your identity or your money – including threatening your life or ‘hijacking’ your computer.

Malware & ransomware

Malware tricks you into installing software that allows scammers to access your files and track what you are doing, while ransomware demands payment to ‘unlock’ your computer or files.

How these scams work

Malware

Malware scammers send emails and social media messages at random with links purporting to be on something topical—news, an event or something ‘interesting’.

If you click on the link you may be taken to a fake website that looks like the real deal, complete with logos and branding of legitimate sites. In order to view the video, you will be asked to install some software, such as a ‘codec’, to be able to access the video format. If you download the software, your computer will be infected with malware (malicious software).

Another way of delivering a malware scam is through websites and pop-ups that offer ‘free’ file downloads, including music, movies and games, or free access to content, such as adult sites.

Malware scams work by installing software on your computer that allows scammers to access your files or watch what you are doing on your computer. Scammers use this information to steal your personal details and commit fraudulent activities. They may make unauthorised purchases on your credit card, or use your identity to open accounts such as banking, telephone or energy services. They might take out loans or carry out other illegal business under your name, or even sell your information to other scammers for further illegal use.

Ransomware

Ransomware is a type of malware that blocks or limits access to your computer or files, and demands a ransom be paid to the scammer for them to be unlocked.

Infected computers often display messages to convince you into paying the ransom. Scammers may pretend to be from the police and claim you have committed an illegal activity and must pay a fine, or they may simply demand payment for a ‘key’ to unlock your computer.

If you pay the ransom, there is no guarantee your computer will be unlocked.

Warning signs

  • You receive an email or social media message out of the blue that claims to contain links to a topical news item or something ‘interesting’, and you are asked to download software in order to view the material.
  • Music files, games, or access to adult sites are offered free of charge if you download a particular program or agree to a pop-up box.
  • Pop-up boxes start appearing on your computer screen. These may have simple questions or a button that says ‘close’.
  • You notice new icons on your computer screen, or your computer is not as fast as it normally is.
  • You are approached by scammers or become a victim of another scam where your personal or financial details are already known.

Threats to life, arrest or other

Threats to life, arrest or other involve demands by scammers to pay money that you supposedly owe and threats if you do not cooperate.

How this scam works

These scams use threats designed to frighten you into handing over your money, and can even include threats to your life.

The scammer may call you and pressure you into paying immediately,  threaten you with arrest, or say they will send the police to your house if you refuse. Scammers will also send emails claiming you owe money for things like a speeding fine, tax office debt or unpaid bill.

Scammers have been known to target vulnerable people, such as the elderly and newly arrived migrants. They will often impersonate government officials from agencies such as the Department of Immigration and Border Protection, the Department of Human Services or Centrelink, and the Australian Federal Police. Scammers will tell you that there are problems with your immigration papers or visa status, and threaten deportation unless fees are paid to correct the errors.

In a similar scam, victims will be contacted over the phone by a scammer pretending to be from the Australian Tax Office (ATO). The scammer will ask for payment of an outstanding tax debt and threaten arrest or legal action if you do not comply. Scammers may also pretend to be from trusted organisations, including energy or telecommunications providers, Australia Post, banks and law enforcement agencies. They may use  email to send fake invoices or fines, and threaten to cancel your service or charge you excessive penalty fees if you don’t pay the bill immediately.

If the scam is sent by email, it is likely to include an attachment or link to a fake website where you will be asked to download proof of the ‘bill’, ‘fine’ or ‘delivery details’. Opening the attachment or downloading the file could infect your computer with malware.

The scam is designed to scare you into handing over your money without seeking any further assistance or information.

Warning signs

  • You receive a call out of the blue from someone claiming to be from a government department, debt collection agency or trusted company.
  • You may be left a message on your answering machine asking you to ring a number.
  • The caller will claim that you have issues with your immigration forms or visa status.
  • The caller will tell you that in order to resolve the matter you will need to pay a fee or fine.
  • The caller may ask for your personal information such as your passport details, date of birth or bank information.
  • The caller may claim the police will come to your door and arrest you if you do not pay the fee or fine immediately.

 

Unexpected money

Scammers invent convincing and seemingly legitimate reasons to give you false hope about offers of money. There are no get-rich-quick schemes, so always think twice before handing over your details or dollars.

Inheritance scams

These scams offer you the false promise of an inheritance to trick you into parting with your money or sharing your bank or credit card details.

How this scam works

A scammer may contact you out of the blue to tell you that you can claim a large inheritance from a distant relative or wealthy benefactor. You may be contacted by letter, phone call, text message, email or social networking message.

The scammer usually poses as a lawyer, banker or other foreign official, and claims that the deceased left no other beneficiaries.

Sometimes the scammer will say you are legally entitled to claim the inheritance. Alternatively, they might say that an unrelated wealthy person has died without a will, and that you can inherit their fortune through some legal trickery because you share the same last name.

You will be told that your supposed inheritance is difficult to access due to government regulations, taxes or bank restrictions in the country where the money is held, and that you will need to pay money and provide personal details to claim it.

Scammers will go to great lengths to convince you that a fortune awaits if you follow their instructions. They may even send you a large number of seemingly legitimate legal documents to sign, such as power of attorney documents. In some cases you may be invited overseas to examine documents and the money.

You may be introduced to a second or even third scammer – posing as a banker, lawyer or tax agent – to ‘help facilitate the legal and financial aspects of the transaction’.

If you make a payment, you won’t receive the sum of ‘inheritance’ money promised to you, and you won’t get your money back.

As part of their story to prove your relationship, these scammers often also seek personal information such as identification or birth certificates. If you provide this information you may also leave yourself open to identity theft.

Warning signs

  • You are contacted out of the blue by a scammer posing as a lawyer or banker and offering you a large inheritance from a distant relative or wealthy individual. They may even ask you to pose as the next of kin to an unclaimed inheritance.
  • The offer looks convincing and may use official-looking letterhead and logos, but will usually contain spelling mistakes and grammatical errors.
  • The size of the supposed inheritance may be very large, sometimes many millions of dollars.
  • You are provided with fake bank statements, birth certificates and other documents if you question the legitimacy.
  • You are asked to provide your bank account details, copies of identity documents as verification, and to pay a series of fees, charges or taxes to help release or transfer the money out of the country through your bank.
  • Fees may initially be for small amounts but you will be asked to make further larger payments.
  • The scammer offers to meet you in person to verify the proposal, but this rarely eventuates.

Nigerian scams

Nigerian scams involve someone overseas offering you a share in a large sum of money or a payment on the condition you help them to transfer money out of their country. While these scams originated in Nigeria, they now come from all over the world.

How this scam works

The scammer will contact you out of the blue by email, letter, text message or through social media.

The scammer will tell you an elaborate story about large amounts of their money trapped in banks during events such as civil wars or coups, often in countries currently in the news. Or they may tell you about a large inheritance that is ‘difficult to access’ because of government restrictions or taxes in their country. The scammer will then offer you a large sum of money to help them transfer their personal fortune out of the country.

These scams are often known as ‘Nigerian 419’ scams because the first wave of them came from Nigeria. The ‘419’ part of the name comes from the section of Nigeria’s Criminal Code which outlaws the practice. These scams now come from anywhere in the world.

Scammers may ask for your bank account details to ‘help them transfer the money’ and use this information to later steal your funds.

Or they may ask you to pay fees, charges or taxes to ‘help release or transfer the money out of the country’ through your bank. These fees may even start out as quite small amounts. If paid, the scammer may make up new fees that require payment before you can receive your reward. They will keep asking for more money as long as you are willing to part with it.

You will never be sent the money that was promised.

Warning signs

  • You receive a contact out of the blue asking you to ‘help’ someone from another country transfer money out of their country (e.g.  Nigeria, Sierra Leone or Iraq).
  • The request includes a long and often sad story about why the money cannot be transferred by the owner. This typically involves some type of conflict or inheritance and they may want to move the money straight into your account.
  • You are offered a financial reward, such as a share in the amount, for helping them access their ‘trapped’ funds. The amount of money to be transferred, and the payment that the scammer promises to you if you help, is usually very large.
  • They will claim that a bank, lawyer, government agency or other organisation requires some fees to be paid before the money can be moved. The scammer will often ask you to make payments for the fee via a money transfer service.

Rebate scams

Rebate scams try to convince you that you are entitled to a rebate or reimbursement from the government, a bank or trusted organisation.

How this scam works

The scammer approaches you with a false claim that you are entitled to a reimbursement or rebate, such as for overpaid taxes, bank fees or some sort of compensation. The contact may come by mail, telephone, email, text message or social media.

They will pretend to be from the government, a bank or trusted organisation, and will ask you to make a small initial payment to cover ‘administration fees’ or taxes, in order to claim the amount owed to you.

If you hand over your money, you will lose it and not receive any rebate. If you provide your credit card or banking details, you may find that more is taken out than expected.

Warning signs

  • You receive a contact out of the blue that claims you are eligible for a rebate.
  • The caller or sender pretends to be from a government department, financial institution or trusted organisation.
  • In order to receive your money, you are asked to pay an upfront fee to cover ‘administration fees’ or taxes.
  • The scammer will typically ask you to send the money via a money transfer service.
  • You may also be asked to provide personal or financial details.

 

Unexpected winnings

Don’t be lured by a surprise win. These scams try to trick you into giving money upfront or your personal information in order to receive a prize from a lottery or competition that you never entered.

Scratchie scams

Scratchie scams take the form of fake scratchie cards that promise some sort of prize, on the condition that the ‘winner’ pays a collection fee.

How this scam works

Scratchie cards are sometimes used in promotions, lotteries or competitions, beckoning users to ‘scratch and win an instant prize’, for example travel or holidays. While some scratchie cards may represent legitimate lotteries or competitions, you should be extremely suspicious of any scratchie card that requires a payment to claim a prize.

Scratchie scams will offer you an instant prize, but when you contact the trader to claim it, you will be asked to provide payment for various ‘fees’ via wire transfer or preloaded money card. The scammer may request bank details and photo identification. In some rare cases you may be asked to travel overseas to collect your winnings.

The scam package may include professional-looking brochures, often for accommodation, which are designed to trick you into thinking the competition is legitimate. It may include contact details for a business overseas and a web address for a fraudulent but professional-looking website.

The up-front payment requested can be as high as a few thousand dollars. If you pay, you will not receive the prize, and you will never see your money again. If you provide your personal details, they may be used for further fraudulent activity such as identity crime.

Warning signs

  • You receive a letter or brochure in your mailbox which includes scratchie cards. Often there will be two cards – one is a losing card and the other has a second or third prize win.
  • The scratchies will say you have to call the company to claim the prize.
  • If you call the organisation they may claim that the scratchies were sent to you in error however you can pay a fee to enter the competition or become a customer to make the win valid.
  • You are asked to send a fee or bank account details to collect your prize. You may be asked to send personal identification as well.
  • The trader offering the prize claims the offer has government approval. This is often accompanied by a request for the payment of taxes linked to the prize.

Travel prize scams

Travel prize scams are attempts to trick you into parting with your money to claim a ‘reward’ such as a free or discounted holiday.

How this scam works

You receive a notification out of the blue, by phone, text, email or post, claiming that you have won a prize in the form of vouchers, often worth $2000 or $3000 for a discounted holiday. You will still need to pay something for the holiday.

The scammer presents you with an amazing offer for a heavily discounted accommodation or holiday package to a popular destination. Other scams offer holidays with tickets to theme parks or cruises at greatly discounted rates. However, in reality the package or the prize doesn’t exist.

Travel prize scams may eventuate after you have been searching for a holiday online and sign up to receive further information. Alternatively, you participate in an online survey and are subsequently notified that you have won a holiday or vouchers. When you go to claim your prize, you are told that you first need to buy more travel vouchers.

If you decide to take up this offer, you will be asked to provide your credit card and licence details before they can send you the ‘prize’. If you hand over your credit card details, the scammer will quickly use these to take money from your bank account. They may also use your personal details to commit some other form of identity crime.

The promised prize or vouchers will either never arrive, or if they do, will be dishonoured when you try to redeem them. Sometimes the scammers will provide you with tickets and an itinerary but when the time to travel arrives, the tickets are useless and the business cannot be contacted.

Warning signs

  • You are contacted by someone claiming that you won a prize related to travel or accommodation in a competition you never entered.
  • In order to receive the holiday you still need to pay a discounted amount. Payment is often requested through cheques, bank or money transfers.
  • The supplier making the offer does not provide any contact details beyond an email or Post Office box.
  • Scammers may claim to be affiliated with well-known and reputable businesses, such as airlines or hotel chains, to try and convince you that they’re the real deal.

Unexpected prize & lottery scams

Unexpected prize and lottery scams work by asking you to pay some sort of fee in order to claim your prize or winnings from a competition or lottery you never entered.

How this scam works

You will receive notification that you have won a lot of money or a fantastic prize in a competition, lottery or sweepstake that you don’t remember entering.  The contact may come by mail, telephone, email, text message or social media.

The prize you have ‘won’ could be anything from a tropical holiday to electronic equipment such as a laptop or a smartphone, or even money from an international lottery.

To claim your prize, you will be asked to pay a fee. Scammers will often say these fees are for insurance costs, government taxes, bank fees or courier charges. The scammers make money by continually collecting these fees from you and stalling the payment of your winnings.

The email, letter or text message you receive will ask you to respond quickly or risk missing out. It may also urge you to keep your winnings private or confidential, to ‘maintain security’ or stop other people from getting your prize by mistake. Scammers do this to prevent you from seeking further information or advice from independent sources.

Lottery scams may use the names of legitimate overseas lotteries (often Spanish lotteries), so that if you do some superficial research, the scam will seem real. Some examples of the real Spanish lotteries that the scammers falsely use are Loteria Primitiva and El Gordo.

You may also be asked to provide personal details to prove that you are the correct winner and to give your bank account details so the prize can be sent to you. Scammers use these details to try to misuse your identity and steal any money you have in your bank account.

Sometimes the scammers actually do send a cheque for part of your winnings, such as a few thousand dollars of winnings, to trick you into thinking the offer is legitimate. However this cheque will eventually bounce and you will not receive any real payments.

The scammer will take your payment and fail to deliver the prize, or send you something that falls short of the promised prize.

A newer version of unexpected prize scams involves scammers gaining access to someone’s social media account and contacting extended family members (aunts, cousins etc) and telling them that they have all won money. The scammer then provides an email address through which they will receive instructions on how to claim their prize.  This is a particularly insidious version of the scam as it uses the trust between family members to succeed in scamming people out of their money.

Warning signs

  • You receive a letter, email or text message saying you have won a guaranteed prize in a lottery or competition that you did not enter. This may come from even trusted individuals like family over social media.
  • The sender claims you are a winner from your email address or social media account being chosen at random. They may say the offer is ‘legal’ or ‘legitimate’, and has ‘government approval’.
  • The unexpected prize might be linked to a company which doesn’t normally run such competitions such as electronics or social media companies.
  • To claim your prize you are asked to buy a ticket, or pay a fee or tax.
  • You may be asked to provide your bank account details, or to send the fee to a PO box number or via a money transfer service.

 

 

Statistics from Scam Watch (November 2019)

Amount lost

$10 347 494

Number of reports

12 759

Reports with financial losses

12.7%

Gender

  • Female 51.9%
  • Male 45.5%
  • Gender X 2.6%

Delivery method

  • Phone 31.7%
  • Email 25.6%
  • Text message 23%
  • Internet 8%
  • Social networking 5.3%
  • Mail 2.6%
  • Mobile Applications 1.8%
  • In person 1.4%
  • Not provided 0.4%
  • Fax 0.1%

Age

 

 

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Categorized as Blog

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