Keeping your money safe from scammers

Scams are all about separating you from your money and for that reason many pretend to be coming from financial institutions both your own and from the ATO and other government departments.

The finance world holds a significant amount of sensitive personal and financial information on you, whether it’s your bank, the ATO, your accountant or your financial adviser. This makes the financial advice industry a prime target for scammers looking to steal identities and siphon funds. It’s crucial you remain vigilant against the growing threat of financial scams.

Remaining vigilant to scammers

A treasure trove of your personal data is out there in many locations – tax file numbers, ID documents, bank details, asset information, and even sensitive medical records. This data is invaluable to scammers who can use it to open fraudulent accounts, make unauthorised transactions, and steal your identity.

In today’s digital world, data breaches are becoming increasingly common, with high-profile incidents at companies like Medibank and Optus exposing millions of Australians to potential fraud. The reality is that your personal information is vulnerable, no matter who you entrust it to. That’s why it’s essential to be aware of the warning signs of financial scams and take proactive steps to protect yourself.

Spotting a financial scam

Scammers are becoming more sophisticated in their tactics, but there are some key red flags to watch out for:

1. Authority figures or celebrities: Be wary of unsolicited calls, emails or social media messages claiming to be from government agencies, banks, celebrities or media figures. You may have seen ads showcasing Mr Beast, Kevin Rudd or David Koch all saying they’ve made money through particular schemes.  Legitimate organisations will never ask you to provide sensitive information over the phone or click on suspicious links, and you need to question why former Prime Minister Kevin Rudd is selling cryptocurrency via Facebook.
   
2. Unrealistic investment returns: If someone promises outsized investment returns with little to no risk, that’s a major warning sign. Remember if it seems too good to be true, it probably is.  In finance, the higher the potential return, the higher the risk. A 15 per cent guaranteed return on your money when the bank interest rates is under 5 per cent cannot be without risk. This sort of excess return is almost certainly a scam.
   
3. Urgency and emotion: Scammers often try to create a sense of panic or fear to pressure you into acting quickly without thinking. They may claim there’s an issue with your account or taxes that requires immediate action. Take a deep breath… and verify the legitimacy of any such claims before responding.

John, an elderly client, was convinced over the phone by scammers posing as the ATO to purchase gift cards and send them the barcodes to “pay a debt.” Despite the clear warning signs, John’s fear and stress caused him to let his guard down. Don’t let this happen to you or your loved ones.

How to protect yourself

The best defence against a financial scams is to assume everything is a scam until proven otherwise. Here are some practical tips:

1. Verify, verify, verify: If you receive any unexpected communication from your bank, super fund, the ATO, or your financial adviser, don’t click any links or provide information. Instead, call the organisation directly using a number you know is legitimate to confirm the request. And don’t be pressured by time. If you don’t get through to your organisation quickly – keep trying before acting on any unexpected communication.
   
2. Check credentials: When working with a financial professional like adviser or accountant, take the time to research their background. Look for their Financial Services Guide, check their ASIC registration, see if they’re a member of professional bodies like the FAAA, registered with the Tax Practitioners Board and check for extra certifications life CFP® or CPA. This helps ensure you’re dealing with a legitimate and trustworthy adviser.
   
3. Change passwords regularly: In the wake of data breaches, it’s crucial to update your passwords frequently, especially for financial accounts. Consider using a password manager to generate and store unique, complex passwords for each login. If your password is the same across many logins, a data breach on Ticketek can result in money from your Superannuation being stolen!
   
4. Monitor your credit report: Take advantage of the free credit check services available to ensure no unauthorised accounts or debts have been opened in your name. This can be an early warning sign of identity theft. You can use Experian, Equifax or illion for free.
   
5. Trust your instincts: If something feels off or too good to be true, it probably is. Don’t let fear, urgency, greed or a sense of authority override your better judgment. It’s better to be overly cautious than to become a victim of fraud.

My teenage son recently fell prey to a fake Mr. Beast giveaway, giving away his father’s sensitive information on the promise of free money. No one is safe, even tech-savvy young people can fall prey to these tactics.
Scammers are constantly evolving their methods, even using AI and deepfakes to appear legitimate, so staying vigilant and educating yourself and your loved ones is essential. Remember, a little caution and diligence can go a long way in safeguarding your most valuable asset – your financial future.

Meet Trish at Hayes & Co Insurance Services or Find a Planner near you!

The Money & Life website is operated by the Financial Advice Association (FAAA). The views expressed in this article are those of the author and not those of the FAAA. The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article. Nor does it endorse or assume responsibility for the information.