Fair Trading

SCAMS

Scams are schemes and ventures that promise unrealistic opportunities to create wealth from investments, or to buy services at prices that are far below those you would expect to pay.

The people who operate and market scams are usually presented in a very professional and attractive manner.

Scams can be sold and circulated in a number of ways. Direct contact via door-to-door salespeople is common as well as telephone contacts, unsolicited mail or advertisements in newspapers and magazines. Increasingly, Get Rich Quick Scams are being circulated via the Internet.

 

COMMON TYPES OF SCAMS

Common types of scams include:

• Lotteries, sweepstakes and competitions
• Chain letters and pyramid scams
• Golden investment opportunities
• Betting and computer prediction software
• Money transfer requests
• Banking, credit card and online account scams
• Internet scams
• Mobile phone scams
• Health and medical scams
• Psychic and clairvoyant scams
• Dating and romance scams
• Charity scams
• Door-to-door scams
• Job and employment scams

For more information regarding any of these scams, please follow the link to Scamwatch www.scamwatch.gov.au

 

What is phishing?

‘Phishing’ refers to emails that trick people into giving out their personal and banking information. These emails seem to come from legitimate businesses, normally banks or other financial institutions. The scammers are generally trying to get information like your bank account numbers, passwords and credit card numbers. This information is then used to steal your money.

Phishing messages and emails often look genuine. They seem to come from a financial institution or other company and they use what looks to be genuine internet addresses. They often copy an institution's logo and message format. This is very easy to do. It is common for phishing messages to contain links to a website that is a convincing fake of the real company's home page.

What is a lottery or sweepstakes scam?

Lottery scams can be an email or letter from an overseas lottery or sweepstakes company that arrives from out of nowhere. It will advise you that you have won a lot of money or fantastic prizes—in a lottery or sweepstakes competition you did not enter.

Lottery scams will often use the names of legitimate overseas lotteries (often Spanish lotteries), so that even if you do some superficial research, the scam will seem real. Some examples of the real Spanish lotteries that the scammers falsely use are Loteria Primitiva and El Gordo.   It is IMPOSSIBLE for you to win these lotteries if you have not bought a ticket from an authorised distributor in Spain.

Other names that scammers will often use are the International Lotto Commission and the Princess Diana Lottery, among others.

 

What are investment seminars & real estate scams?

Some investment seminars may try and convince you to follow high risk investment strategies, such as borrowing huge sums of money to buy property. Others promote investments that involve lending money on for no security—or with other risky terms. While investment advice can be legitimate and beneficial, it is important to look carefully at what an investment scheme or seminar is offering. Attending an expensive seminar or investing in the wrong kind of scheme can be costly mistakes.

You could be invited to an investment seminar in a number of ways—you might receive a letter drop in the mail, see an ad in a newspaper or magazine, or hear about it through word of mouth. The seminar may promise that a motivational speaker, an investment expert or even a self-made millionaire will give you advice on investing.

 

What are work from home scams?

Work-from-home scams are often conducted through spam emails, or advertisements on noticeboards. Most of these ads are not real job offers. Many of them are actually fronts for a money-laundering scam, an upfront payment scam or a pyramid scheme.

You might receive an email offering a job where you use your bank account to receive and pass on payments for a foreign company. These ‘job offers’ promise that you will receive a percentage commission for each payment you pass on. Transferring money for someone might be money laundering and you could wind up in trouble yourself for taking part in these ‘jobs’. Sometimes, these scammers are just after your bank account details so they can clear out your account.

 

 

STEPS IN PROTECTING YOURSELF AGAINST SCAMS

You can avoid being caught in a scam by observing some or all of the following advice:

• ask the name of the person you are speaking to, who they represent, obtain ABNs, addresses, contact numbers and keep notes of conversations;
• ask for explanations of things you do not understand;
• seek professional help in understanding the offer and terms and conditions of the venture;
• check the bona fides of a company with the Australian Securities and Investments Commission;
• make any decisions carefully and take the time you need - do not be rushed by high-pressure salespeople and short deadlines;
• do not judge the venture by the professional appearance of promotional material - the basis of many scams is the seemingly high quality of personnel and material;
• do not provide any financial or personal information before you establish whether the company is legitimate;
• ask questions - even if the venture is legitimate, the more questions you ask the better;
• if you encounter a problem, do not let embarrassment or fear keep you from reporting fraud or abuse to the appropriate authorities;
• be cautious of 1900 and 0055 telephone number scams. These calls are often very expensive; and
• be wary of free travel and accommodation deals. They are often loaded with terms and conditions that erode any advertised savings.

.Remember - if it sounds too good to be true it probably is!

              Click here for Scam Alerts and Media Releases relating to scams

Further information can be obtained by logging on to www.scamwatch.gov.au or check out The Little Black Book of Scams.

 

The Australian Competition and Consumer Commission (ACCC) also provides excellent information on its website.

 

This page last updated 22 May, 2009  | ACT Government © Copyright 2007 | Disclaimer | Privacy