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How to avoid money transfer scams

Man with magnifying glass investigating money transfer scams

In 2021, Australians have lost more than $130 million in scams. According to the Australian Competition and Consumer Commission (ACCC), most people lose money through investment and money transfers scams.

Most of these scams happen through phishing. This sort of scams trick victims via emails, texts or websites into giving their personal details like bank account numbers, passwords, credit card details and super details. Most of the time this sort of scam requires you to click on a link or to transfer money somewhere. And most people do not double check if the money transfer service is reputable.

The ACCC, estimates that only about 13% of scam victims actually report the scam. Based on that data alone the organisation discovered that in 2019 Australians lost over $634 million, which was a 30% increase from 2018.

Four of the most common scams of 2021 are

  • Email scams
  • Online dating scams
  • Online shopping scams
  • Money flipping scams

In ACCC’s targeting scams 2019 report, Delia Rickard, ACCC’s deputy chair of the scam awareness network said, scammers use local events and global crises to exploit the situation. During the bushfire crisis of 2020, many scammers pretended to be charities asking for money transfers in order to give aid to victims of the bushfires.

“Avoid using third party intermediaries, or agents who offer to make transactions on your behalf, and if you need to transfer money overseas, once you have checked the recipient, use a trusted money transfer service like WorldRemit to ensure that your money does arrive in time,” said David Dry, WorldRemit’s APAC regional compliance director.

Email scams

Email scams are the most common type of scam you can find. Most of the email scams impersonate emails of legitimate institutions like the ATO, said Dry. Usually scammers play on emotional triggers such as being late on a payment or owing a large sum of money, which can be ‘easily’ solvable by clicking on the link provided to make a payment.

Avoiding email scams

  • Avoid opening links and attachments from unsolicited emails
  • Double check senders email addresses
  • Avoid emails that induce panic
  • Beware of poor grammar and spelling mistakes

Online dating scams

The ACCC reported that in 2021, Australians lost $28 million to online dating scams. In a typical dating scam, the scammers create a fake profile and try to gain your trust to later profess their love. These scammers then promise to visit you but there is always something stopping them (usually surrounding financial troubles). That is when they start asking to borrow money from you using a sob story. In 2019, there were almost 4000 reports of dating fraud.

Avoid online dating scams

  • Don’t send money to someone unless you’ve met them in person or via video
  • Double on other social media channels to see if their profile is consistent
  • If the profile pictures looks fishy, try reverse searching the image
  • Don’t trust anyone asking for your bank or credit card details

Online shopping scams

So far in 2021, Australians have lost $3 million to online shopping scams. A really common one is when representatives of random companies slide into your DMs wanting to give you free products to review. However the catch when you end up having to pay a ridiculous amount for the shipping and you never receive the items.

Avoid online shopping scams

  • Read reviews about the quality of the item
  • Check that the website has ‘https’ in the url and a little lock icon
  • A website should not have a IMT option as payment
  • Be wary of websites that ask for unusual methods of payments, like gift cards.

Investment scams

In 2019, Australians lost $61.8 million to investment scams and $21 million of those scams were cryptocurrency investment scams. Most of these scams make promises of quick money investments (typically overseas) by offering the ‘deal of a lifetime.’ If something sounds too good to be true, it usually isn’t true. It’s usually near to impossible to reverse money transfers transactions once it goes overseas, and scammers know this.

Avoid investment scams

  • Beware of promises of high returns with little to no risk
  • Be wary of unsolicited investment opportunities via email or social media
  • An investment usually comes with paperwork or a contract, it is somehow paperless it might be a scam
  • Check with a reputable finance adviser before investing

Scammers like to use online money transfer services to facilitate their illegal activities. These scammers will typically say that there was missed bill payment and ask the user to transfer money to fake a charity account.

“Always use a reliable money transfer company to make your payments,” said Dry. “Always check the IMT is registered with AUSTRAC; this provides you with the assurance that the provider is legitimate. The best way to stay safe and avoid money transfer scams is to be educated and informed before making any decisions in regards to money transfers, be it big or small amounts.”

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Maria Gil
Maria Gil
Money writer

Maria Gil writes across all of our personal finance areas here at Mozo. Her goal is to help you think smarter about money and have more in your pocket. Maria earned a journalism degree in Florida in the United States, where she has contributed to major news outlets such as The Miami Herald. She also completed a masters of digital communications at the University of Sydney. When Maria isn’t busy with all things finance, you can find her tucked away reading fantasy books. She is also ASIC RG146 (Tier 2) certified for general advice.

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