How to protect yourself from scams

If it sounds too good to be true, it probably is.

But who could blame you if you take a leap of faith once in a while?

Unfortunately, scammers rely on that ‘leap of faith’ mentality to trick unsuspecting victims every day.

According to ScamWatch, there have been more than 160,000 financial scams reported to the Australian Competition and Consumer Commission this year alone – with a whopping $425 million lost to scams.

Statistics reveal 58.6% of those scammed were male, with 33,000 scams reported in the over 65 age group and 22,000 in the 55 to 64 age group.

The five most common types of scams reported were:

• Phishing scams
• False billing scams
• Online shopping scams
• Identify theft
• Remote access scams.

So how can you protect yourself from scams and safeguard your hard-earned money?

This might be the hard part.

In recent years, scammers have upped their game.

These days, scammers:

• Often use legitimate business numbers confirmed by the Australian Securities and Investment Commission (ASIC)
• May have call centre staff trained in persuasion techniques
• Create complex website portals that even the most discerning will think are legitimate.

But the golden rule is – while some investment paths do indeed reap quick rewards – always be suspicious of anything promising “big payouts,” “guaranteed returns” or “instant riches.”

At First Financial, we recommend you obtain independent financial advice before you invest – no matter how great the opportunity sounds or how pressured you feel to put your money towards it today.

You should check the person advising you is listed on the adviser register before you do anything.

If someone approaches you with an investment “opportunity,” walk through these three steps first.

1. Ask questions

Fraudsters rely on you believing their sales spiel, which can be quite beguiling, but can often be easily undone by a few simple questions. A legitimate opportunity will allow for time to do research.

2. Protect yourself

During your information-seeking phase about a financial opportunity, don’t share your personal information. This includes your personal particulars (such as birthdate), your bank account details, your credit card information or information about your job, business or family.

Do not transfer any money – not even a small amount. A real opportunity will always give you enough time to research and fill out the necessary information.

3. Seek financial advice

If the first two steps fail to reveal an obvious scam and you still wish to follow up on the potential opportunity, contact your financial adviser to discuss your next steps.

At First Financial, we guarantee that we will never subject you to high-pressure tactics when discussing your investment path.

Building your wealth and making the most of your money will never require you to “act immediately or miss out” and this mentality should be a red flag.

Scammers target all sections of society, and all of us may be vulnerable to a scam at some point.

According to ACCC Deputy Chair Delia Rickard, the number one red flag in a scam is the cold call.

“Investment scams often begin with cold calls – promising low risk investments with high returns and can go on for months, resulting in high individual losses,” Ms Rickard said.

“If a deal sounds too good to be true, it probably is. Don’t let anyone pressure you, and make sure you take the time to research the investment opportunity and get financial advice before agreeing to anything.”

ScamWatch suggests the best ways to protect yourself from a scam and avoid being hoodwinked include:

• Acknowledging that scams exist

None of us want to believe a scammer would ever get catch us, but scammers net unsuspecting victims every day. You don’t have to live your life as a cynic, but it’s important to be on guard when it comes to sharing personal information and managing your money.

• Keeping your devices secure

Choose passwords carefully and be suspicious of pop-up window browsers and people requesting remote access to your hardware.

• Be aware of fake documents

Technology makes it easier than ever to create false documents that look legitimate, but keep in mind that most companies will not request an unexpected payment out of the blue.

If you do receive a document requesting payment that is not part of your regular billing cycle, don’t hesitate to call the company directly to confirm the request.

• Check your accounts and payments regularly

Do you have several direct debits set up? Subscription television, mobile phone apps and other regular payments may indeed be a part of your banking statement, but how often do you take stock of them?

Check your bank statements regularly and ensure there are no unauthorised payments.

Scammers often take very small amounts of money first to test the waters before withdrawing large sums.

If you think you have been the victim of a scam, there is help available, but sadly, government authorities are not always able to recover the funds you lost to the scam.

The ACCC has collated a list of Australian authorities that can assist you if you’ve been scammed and can also help you to report a scam.

Reading about how others were lured into scams so you are more aware of the type of illegal activity that goes on can also be a great preventative measure.

The best way to safeguard yourself from investment and other financial scams is to seek the advice of a qualified financial adviser when it comes to making decisions about your money.

At First Financial, we are with you every step of the way on your pathway to wealth and we use a systematic and structured approach to get you there.

At no time during the process will we persuade you to invest outside of your risk tolerance profile, and we will transparently monitor every single cent you have invested so that you can keep track of it.

The advisers in our team are knowledgeable, friendly and qualified to help you to:

• Build an investment portfolio
• Accelerate your super
• Prepare for retirement
• Protect through insurance
• Be tax effective and much more.

It is our job to help you to feel confident and comfortable about securing your financial future as we have done for many satisfied clients.

Contact us today.