Fraud is a serious problem in Australia. According to the Australian Bureau of Statistics’ latest figures, 1.2 million Australians were the victims of fraud in the year to 2010/2011, or 6.7 per cent of the population. Across the period, $1.4 billion was lost by Australians as a result of fraud, with $2,000 being the average amount lost for three out of five people who had experienced fraud.
This research shows just how important it is for Australians to know how to identify a fraudster, and follow steps to protect themselves from scammers. So here are our top four tips to reduce the risk of being scammed.
1. Do your research
It’s essential to do thorough due diligence before entering into any commercial agreement with another party. There is a lot of information that is publicly available you can use to check if the counter-party to any transaction is bona fide. For instance, you can go to the Australian Securities and Investments Commission’s (ASIC) website to search for company names, and also find out if financial professionals have been banned from operating in their industry.
2. Don’t respond to pressure
Hear alarm bells ringing if you are receiving pressure to sign a contract, agree to a sale or hand over money. No legitimate business will pressure you into buying their products or services. It’s a good idea to consult a professional such as your financial adviser or solicitor before signing any contract.
3. Know your rights
In many cases a cooling off period applies when it comes to buying financial products or large purchases such as property. This means you can back out of the transaction within a certain period after signing a contract.
These are state-based laws and the length of the cooling off period differs depending on what you’re buying and where you live. Go to the web site of the body responsible for consumer affairs in your state for information about the length of the cooling off period that applies to your purchase.
So even if you are pressured to make a purchase or sign a contract by a scammer, in most cases it’s possible to back out of the arrangement within a certain time frame.
Also remember that fraud is a criminal offence. If you are the victim of fraud, or find you have been scammed, it’s important to immediately report your experience to the police.
4. Know a scammer when you see one
A scam is any attempt to unlawfully make you pay money or hand over your personal details. One of the more common scams are emails from Nigeria, asking you to provide your bank account details so the sender can purportedly send you a large sum of money. They are always fraudulent. If something looks too good to be true, it almost always is.
Phishing is when you receive an email from your bank or another organisation with which you do business, asking for you to provide your password or other personal details. Your bank, your telco and your energy provider will never ask you to email this information to them. Any email that appears like it’s from your bank and asks for personal details is a scam.
Shopping and auction fraud
It’s essential to only buy goods and services from reputable businesses over the internet. Make sure when you are buying online you transact with businesses that have a secure payment gateway. An option is also to pay with PayPal, which means you don’t have to hand over your credit card details. Look for the Verisafe Mobile Security icon, which is a sign the business is reputable.
If you think you are the victim of fraud, it’s essential to notify the police immediately. It’s also important to work with your financial adviser on an ongoing basis to ensure your wealth and investments have the highest protection possible.