In the wake of a recent report showing that gullible Aussies forked over the best part of $70 million in scams in 2009, we decided to take a look at the Top 10 scams that have hit the country in the past 12 months.. Bear in mind, that the Australian Competition and Consumer Commission (ACCC) believes that the true cost is nearer to $1 billion due to a large amount of people too embarrassed to admit they have been he victim of fraudsters. Here is the list with the percentage of dollars taken by the online con artists.
10. Computer Prediction Software (2.4 per cent)
This scam involves handing over monies for a software program that the seller guarantees you winnings on horse racing and other forms of gambling. They usually cost a lot of money (in excess of $15,000), yet people buy them by the truck load. Before buying the software, ask yourself this: “why they are selling you this information instead of making millions themselves?”
9. Mobile Phone Scam (2.4 per cent)
This is a hard one to avoid, and one which this writer’s wife fell for a few years ago. It might come in the form of an offer for a service that you don’t need, or a game that you unwittingly join up for via a text message. However, you sign up not realising that every text you receive costs you and takes credit from your mobile plan. If you receive a text message from an unknown source, delete it. If you reply, you could be signing yourself up for one of the aforementioned premium services or games and wonder why your credit starts running out so quickly.
8. Dating and Romance, Adult Services (2.7 per cent)
This type of scam preys on those who are looking for love online. Quite a few of these adult dating websites promise certain things when you sign up – such as meetings or introductions with model-like men and women, when in fact the pictures online are not of signed up members and are false profiles. They try and get you to sign up to varying degrees – ie: X amount of dollars gives you five contacts, while Y gives you 10. What you get though, is false promises and an empty wallet and heart.
7. Job and Employment, Business Opportunity (5.0 per cent)
Surprisingly up to five percent of those scammed fall for this category, which includes pyramid, or Ponzi, schemes (think America’s Bernie Madoff $50 billion scheme), chain letters, and a work-from-home scheme. The pyramid scheme is easy to spot – you get asked to put money in with the promise of getting a whole lot of money out at a later date. With the work from home scam, you are asked to pay up front for some business plan or materials that never arise, while a chain letter is basically the same as a Ponzi scheme – asking you to send on money to people who have sent you the letter, while advising you to pass the letter onto more people and asking them to send you money, and so it goes on.
6. Banking and online accounts (6.7 per cent)
One of the more insidious schemes because it usually fools the elderly, or those less technically inclined. These rip-offs come in the form of an email or phishing site. You will receive an email saying that the bank has had its network go down, or something similar, and you need to reset your password. The scammers send you a link to the bank’s website, but it is in fact a phishing site. Phishing is when the scammers have gone to the trouble of building a website that looks exactly like your bank’s. So you put in your account details and password, which they then steal and start emptying your bank account. Be assured, that NO bank will ever ask for your password over the internet.
5. False billing (6.8 per cent)
False billing is not just the domain of the internet and has been around for some time. This is aimed at small businesses and it relies on your ignorance of what type of advertising you do. You will receive a bill in the post or via email for a listing in a business directory or magazine. However, they are cunning, because what they have done is got your listing from a genuine directory and are hoping that you think this is why you are being billed. Diligent people will check their account to see if it has already been paid, but they rely on people just passing the bill onto their accounts payable person and they send of the electronic transfer or cheque.
4. Unexpected Prize (9.0 per cent)
Everybody receives one or two of these a day in their spam folder, but still almost 10 percent of Aussies fell for it last year. It sounds great at the outset – you’ve won a brand new television, home theatre system, or car. Warning bells should sound straight away if they ask you for any of the following – a fee to collect your prize; you must buy a ticket to collect the prize; you have to phone an 0900 number; and the dead giveaway – being told to send any monies to a Post Office Box.
3. Lottery and sweepstake (10.8 per cent)
Another old one, but still a good one if you are a scammer. You will receive an email advising that you have won a lot of money in an overseas lottery. How 10 percent of Australians fall for this is anybody’s guess, especially when they surely know they haven’t bought a ticket to an overseas lottery. In most cases spammers do use real lotteries, but not from Australia. Again, they make their money by asking for fees to release the winnings, plus couriers costs etc. One thing they also do is try and prolong the payment of the winnings by asking for more and more fees.
2. Online auction and shopping (16.6 per cent)
Not surprising to see this one near the top, with a tonne of products now for sale on line through the likes of eBay, Gumtree and other online trading sites. It is one of the easier ways to get scammed, too. Those who are after your hard-earned dollars typically try to sell products at prices that are too good to be true. However, on most occasions they are not interested in getting those small amounts of money, but your credit card details. We advise that you go through well-known auction houses that not only have a feedback system, but have a means you can redress any complaints that arise.
1. Advance fee or up-front payment (32.4 per cent)
At number one comes the up-front payment scam that has cost Australians over $22 million. Some sympathy is lost due to the fact that these scams have been well publicised and around for an age. You know, the old Nigerian scam, whereby some “CEO” of a diamond company, or a “lawyer” trying to get you to send account details because some rich tribal chief has died without any heirs and has left a huge sum of money to be picked up. Where they made their money at your cost is when they ask for the admin fee, shipping costs or postage that can run into thousands of dollars.
At the end of the day, there is an old, tired adage, which is so true, it’s a wonder people don’t stop and think before going ahead and being scammed – If it sounds too good to be true, it is!