Australians lose almost $500 million to scams in 2018

Australians lose almost $500 million to scams in 2018

The ACCC has reported a staggering increase in the amount of money lost by Australians to scammers this year, as we all just hug our credit cards and bank accounts a little tighter. How can you help avoid getting fleeced?

There’s a new report out, and it suggests Australians are losing big time from scammers, be it those using email, social, or just good old regular phone calls.

Released this week by the Australian Competition and Consumer Commission (ACCC), “Targeting Scams” highlights the Australian activity of scams in the past year, informed partially by the ACCC’s Scamwatch website, which receives reports from the general population on scams being perpetrated.

This year’s report highlights not just the type of scams we’re falling for, but the sheer amount of money lost in the past year, which counts in the hundreds of millions.

Scammers target every demographic

No age group is safe from scammers, it seems, with the ACCC report revealing that every age bracket succumbed to scams in 2018.

While the majority of scams appeared to incur serious losses for those aged 45 and higher, younger people were also filing reports with the ACCC, and just over $170,000 was lost from people under the age of 18.

The most popular types of scams centre around investments and romance, and while each work differently, the result is still the same: people lose money from something that is promised but never delivered.

Men and women are both being hit by the scams, so no one is safe, though they’re also losing money to scams in different ways. While men are more likely to be affected by investment scams, women were more affected by dating and romance scams, with each seeing a loss well into the tens of millions of dollars on either side ($29.1 million in 2018 for men in investment scams; $19.5 million in 2018 for women in dating and romance scams).

And it’s happening everywhere in Australia, with every state seeing reports of scams and losses, with some targeting specific demographics.

One new scam that kicked off last year was specifically focused on people who spoke Mandarin. Called the “Chinese Authority scam”, it left phone messages in Mandarin that would suggest a package had been left or the authorities were calling, with this conversation kickstarting the scamming process.

It’s not the only new scam, as the ACCC has seen a twist on an old favourite.

We’ve all likely had someone pretend to be from Microsoft or the phone company calling to tell us that our computer has been hacked, but now scammers are using the guise of the police to hammer that message through, to keep you on the line, to gain access to your computer and have you send money that you will “later on be reimbursed for”.

But like all scams, it’s just another lie, and one you shouldn’t trust lest you want to become another statistic.

Scams

The statistics on Australians being scammed

The savings account of every Australian may well feel under threat lately if the ACCC’s Scamwatch scam stats are anything to go by.

We’re losing over $30 million to scams over the phone, $25 million to scams over email, $15 million to scams initiated over social media platforms like Facebook and Instagram, and even $2 million in SMS.

In 2018, 177,516 reports were made to Scamwatch, and while $107 million was reported in losses to Scamwatch, up 18 per cent from the previous year, the combined reported financial losses from Scamwatch, ACORN, and other government agencies totalled $489.7 million.

And the losses are coming from various scam types, including $86 million from investment scams, $60.5 million from dating scams, while other scams rack up millions of dollars including fraudulent online shopping, betting scams, and even threats to your life or suggestions of arrest.

Tips to stay safe with scams

So how do you stay safe as scammers come out swinging, looking for seemingly any way possible to rid you of the treasure lurking in your savings account?

Check everything

Scams are all about tricking you, and this can happen when you don’t think about what’s happening.

You might get an SMS or a phone call, and it might sound remarkably believable. If a message comes from the ATO or a phone call from the police, you might not normally question it, but in these examples, it might be best to.

If the Australian Taxation Office sends you a message, call the ATO using the phone number on its website and find out whether it was real. Likewise, if the police call you to use your computer as a way of tracking scams, call your local police department (don’t call 000, as that’s for emergencies), and ask whether anything like this is going on.

The same is true if you’re sent an email or a website from a company you think is legitimate: check the email address or website URL carefully. If it doesn’t seem right, it probably isn’t, and you can discard it immediately and move on with your life.

Question everything

It doesn’t seem like much, but raising a question is like raising a red flag, and could be the very thing that saves you money in the end.

If someone is trying to pull the wool over your eyes, ask you or them questions and see if the answers make sense.

Did you see a cute online advertisement talking about a foolproof way to make money, or maybe one selling a phone or a pair of shoes at an unbelievably low price?

Ads like these are known to ensnare people, and if you think to ask a question like “how” or “why”, you might not get caught.

If someone keeps asking you for money, work out whether that’s the sort of thing a real person would do, particularly one you’ve never met before.

Your close friends probably wouldn’t do that, so why would a new friend?

Remember there’s no such thing as a free lunch

It’s nice to win prizes and get things for free, but the price of free is normally more than what the word would suggest.

“Free” is rarely that, and if you’re offered something too good to be true, it’s always worth questioning whether it could be.

It’s a whole lot better than just becoming yet another number and another statistic.

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Learn more about bank accounts

How can I wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

How to transfer money to another bank account

Transferring money to another bank is often called a bank transfer, and it can be done a few different ways.

Customers generally need three pieces of information to transfer money to another bank account. Customers need the account name, BSB and account number of the account they wish to transfer money to.

One way of transferring money to another bank account is in a branch with the help of a staff member; they will often give you a receipt as well as confirmation of the transfer.

Transfers can be also made via internet banking and phone banking.

Some banks also allow customers to make transfers via partnered ATMs, especially if the account is with the same bank.

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

Can the government take your money from your bank account?

There are some instances when the government can take money from your bank account. This generally occurs in situations where you have an outstanding government debt.

Before it can take money from your bank account, the government authority owed money would first need to issue a garnishee notice. 

A garnishee notice is issued by the government agency (such as Centrelink or the ATO) to a third party that holds money for you or owes you money.

To take money from your bank account, your bank would be issued with the garnishee notice requiring it to pay ‘your money’ to the requesting agency to satisfy the debt.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

What do you need to open bank accounts?

Opening a bank account is one of the simplest online tasks you could perform. The hard part is deciding which type of bank account you want to open.

All banking institutions have a website where you hit ‘apply’ on the account of your choice and step through an application in less than 10 minutes.

Here’s a list of information that is generally required for applications.

  • Identification (driver’s licence, passport, proof of age card, proof of citizenship and/or birth certificate)
  • Tax file number (so you don’t get charged the highest tax rate)
  • Address, contact email and phone number

If you decide to open a new account at the branch, make sure you ask beforehand what information you need to take with you, or take all of the above to be safe.

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

Can I close my bank account over the phone?

In most cases, you can close a personal or business bank account over the phone. In fact, this is the best way to ensure you’ve closed an account properly.

By speaking to a banking representative, you can capture and close out any pending transactions, or interest owing/payable on the account being closed.

In the instance where the account is a joint account, or you have multiple bank accounts you want to close, your bank may send you a form that you need to fill out and return.

Either way, you would be advised over the phone of the steps you need to take. Calling your bank ahead of closing an account is often a smart course of action.

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a branch

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.