Scams

A scam is a nickname for the criminal offence of fraud. Fraud is an offence which carries penalties up to 12 years’ imprisonment in Queensland.

How do scams work?

Scams may be presented at a meeting, during a personal conversation, through mail/phone or over the internet. The approach may be from a person you regard as a good friend (affinity fraud), or may be a person you have recently met. They offer to improve the quality of your life in some manner at minimal or no risk. Fraudsters are usually very professional in their approach and often use associates and professional looking documents to support their offer.

Many fraudsters have embraced the internet to locate new potential victims. With the internet, the ability you have to assess the person is very limited as actions such as body language cannot be assessed. Also, many identities are stolen from legitimate individuals and these identities are presented to the target. Inquiries undertaken identify this person exists; however, the real identity is unaware their identity has been stolen and is being used in a fraud. Some of the more common scams include:

• Get rich quick schemes
• Miracle health products
• Competitions & lotteries
• Pyramid/referring selling/multi-level marketing
• Nigerian loan/investment scams
• Work at home schemes
• Receiving money from a third world country
• Relationship Fraud
• Sports Betting Investment Programs
• Investment opportunities
• Receive money into your bank account to forward onto another party
• Inheritance Scheme
• Phone calls offering goods or services

The internet allows you to reach out to the world, however also allows the world to reach out to you and your computer. Unique opportunities are presented from persons you have never personally met and you are encouraged to take advantage of this opportunity.

The frauds requires you to send money to the person you have usually never met with the expectation of a reward being accepted. This reward may be financial; the receipts of goods purchased or even an emotional/ health related reward. 

Internet fraudsters work full time with the intention of defrauding Australians through online communication. They operate in syndicates and are very skilled in identifying and targeting what they perceive as people’s vulnerabilities. Many programs exist which can be used to create and modify documents, and these appear to be very professional when presented to their intended victim.

With the advancement of technology, email has become a fast and efficient method of forwarding unsolicited scam information to bulk recipients. Your email address could have been obtained from various sources, including a virus affected address book that automatically sends or forwards mail without the knowledge of the user, or from online databases. Whilst the criminal community knows most of these emails will be caught in spam filters or deleted by the recipient, they are aware that a small percentage of people will respond to them. These are the individuals who will be defrauded and lose potentially a large percentage of their wealth if not all of it.

Fraudsters seek to build a personal relationship between you and themselves. They seek to obtain your trust, and develop the situation where you have a reliance on them. In investment schemes, they represent themselves or introduce their associates as influential persons holding senior positions who can provide assistance. They also present their scheme as having low or no risk and returns higher than what could be achieved from a bank.

Be very sceptical of individuals representing themselves as foreign government officials or senior executives asking for your help in placing large sums of money in overseas bank accounts. Do not believe the promise of large sums of money for your cooperation. You are being lined up to be defrauded by a skilled fraudster.

With investment schemes, be very suspicious of any person wishing to make you wealthy with a low risk, high return investment. Always seek independent financial advice and be prepared to walk away from the opportunity. Many online investment schemes are fake and designed entirely to fool you.

Always consider the impact to you and your family should the investment opportunity fail and the opportunities you have to take legal action. Seek independent financial and legal advice from a person qualified to do so and be prepared to accept it! Should the persons seeking your money encourage you not to seek independent advice or send you to an associate, treat this as a warning sign which should not be ignored!

A fraudster’s first goal is to commence a conversation with you and find out more about your personality and goals. They are not doing this because they are friendly or desperately trying to make you rich, they are doing it to find a strategy to get your money! They back themselves that once they are in a conversation with them, they will be able to entice you into their scheme.

Once in the scheme, it is very difficult to get out. Early results provided may be very positive and initial interest payments made. This is a strategy to build your confidence and they are planning the next move which is to encourage you to invest larger amounts of money. They will emphasise the amounts of money you are supposedly making, even providing links to web pages showing how well your investment is doing. The web page has been created by them and their associates and the numbers are made up.

Once the investment starts falling over, the fraudster will encourage the investment of further money to ensure the company does not fail with the guaranteed loss of your investment. The promise will be made that the additional investment will save the company and all funds will be returned. This is merely a long planned strategy to obtain further funds from you. 

Be cautious when responding to special investment offers (especially through unsolicited e-mail) or when dealing with individuals/companies outside Australia, as problems can be experienced with locating the person and with the difference in laws. Foreign investments involve different laws and would involve the employment of a local lawyer to help recover your funds should problems occur. Prior to investing in a foreign country, seek independent advice from the Department of Foreign Affairs and Trade, that countries consulate/embassy in Australia or an independent lawyer who has specific expertise in legal matters in that country.

How do I protect myself?

A good defence to fraud is to be very suspicious of the opportunities presented and ask lots of questions. Do not accept what you are being told is true and make your own independent inquiries; not with the persons recommended.

There are many avenues of conducting independent advice including lawyers, financiers, banks, accountants and government agencies such as the Office of Fair Trade, ASIC or the Police.

Websites such as staysafeonline.