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How to identify a scam


7 red flags to help spot a scam.

What do all scammers have in common? Most scammers are opportunists, looking to prey upon the trusting nature of the general public. This means that identifying and avoiding a scam is actually not too difficult. All you need to do is stay aware and remain cautious. Here are some of the ways to spot a scam and avoid becoming a victim.

1. Payments via gift card

A common tactic used by scammers is convincing customers to go out and buy gift cards to pay a tax debt or help catch hackers. Customers are asked to call back with the serial numbers on the gift card, which is used to make money or purchase goods to then sell on. Also be mindful of transactions that only accept payment via gift card or heavily encourage the use of gift cards as the primary payment method.

Scamwatch found that victims lost more than $5m via gift card scams in 2018, an increase of 38% from 2017.

2. Money is requested via social media

Social media is a wonderful thing, giving us the means to keep in touch with old friends and make connections with like-minded people from all over the world. However, it is also a forum for internet scammers.

Be wary of any requests for money via social media. This includes requests from seemingly legitimate, "official" accounts. By social media, we mean any platform for digital communication, covering dating networks and gaming platforms as well as the traditional social media channels. 

3. Payment is needed to secure a prize

You've won a prize - great. But now you have to send a specified amount of money to secure or to release this prize. This is unusual. The idea of most giveaways is to "give something away" - not to sell it for a reduced price. Avoid any prize draw if payment is required, especially if you did not enter any prize draw in the first place.

4. A dodgy download is required

You may not need to actively give a scammer information yourself. You may fall victim after downloading malware that takes data from your device. Don't panic though, simply be vigilant about any downloads that are required.

The Australian Competition & Consumer Commission (ACCC) reported that $31,000 was lost to such scams in 2018. Many of these losses occurred after users downloaded phony delivery labels or tracking applications. If you have robust malware protection, you will be able to safeguard your devices better.

5. Something doesn't look right

If you are directed to a landing page or to another area of the internet, take a look around before you surrender your information or make a payment. Reputable websites really look the part, so you may be able to identify a fraudster by spotting mistakes.

Spelling errors, weird formatting, invisible links that are clickable on the screen, links that initiate downloads, unprofessional web design -- all of these are indications that the site is not what it seems.

6. The email address is all wrong

Just like websites, the same applies if you receive an email. For example, perhaps you received an email from your financial institution or other providers, but you are suspicious. If so, check the email, and make sure it matches with the officially listed address. If in doubt, simply get in touch with the provider’s support team.

7. A trusted source is asking for too much information

A financial institution will never ask you for your PIN or password, and other trusted retailers or organisations should also not ask you for too much information. If they do, this is a major red flag, and you should take steps to report or verify the communication with the source.

Always contact your bank immediately if you feel you have been the victim of a scam, and report the scam to the ACCC.

This article is intended to provide general information of an educational nature only. This information has been prepared without taking into account your objectives, financial situation or needs. Therefore, before acting on this information, you should consider its appropriateness having regard to these matters and the product terms and conditions. Information in this article is current as at the date of publication.

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