Understanding types of frauds and scams
Scams are becoming highly elaborate and more sophisticated every day. Scammers often target individuals through social engineering (methods used to manipulate people to carry out specific actions or share confidential information). Contact is then made with the potential victims after the scammer has gathered information about them through their social media profiles, and the websites they have visited.
If you believe you may have been scammed, contact the OFXpert team straight away.
Protect yourself from scams and fraud by gaining a deeper understanding of the current trends below:
Investment scams involve promises of “once-in-a-lifetime” opportunities, or guaranteed returns. They target your personal wealth by convincing you to invest in fake schemes or companies. If it seems too good to be true, it probably is.
There are many types of investment scams, such as:
- Ponzi schemes
- Cryptocurrency investing
- Boiler rooms
- Pyramid schemes
How to spot this scam:
Investment scams can look and sound authentic. The scammer often sounds legitimate and knowledgeable, with sophisticated promotional materials, facts or forecasts. This can make it hard to tell them apart from genuine investment opportunities.
Some red flags to watch out for include:
- A promise of low risk, high return
- An unprompted or unsolicited email or SMS
- High-pressure tactics or a sense of urgency
- Being asked to deposit funds into different accounts for each transaction
Identity theft involves the theft of your personal information including your name, date of birth, or address. Although identity theft is not a scam itself, it can occur as the result of being scammed. It’s one of the most common fraud types in the world today. With your personal information, scammers can:
- Access and drain your bank account
- Open new bank accounts in your name and take out loans
- Purchase expensive goods in your name
- Access your email or social media accounts
Red Flags to Watch For:
- You notice unexpected large sums of money missing from your bank account
- You receive invoices or receipts addressed to you for goods or services you didn’t purchase
- You can’t log in to your social media or email accounts
Phishing or spoofing
Phishing or spoofing involves a scammer sending fraudulent emails or other communications that appear to have come from legitimate companies. It is an attempt to “phish” for personal information, including your address, logins, phone number or banking details.
How to spot this scam
Phishing or spoofing scams are designed to look genuine and often copy the format used by the company the scammer is pretending to represent.
- Sender address is unusual, misspelt or slightly different from the correct address
- The email or SMS doesn’t address you by your proper name
- Poor grammar and spelling
- You receive an email or SMS claiming to be from a business you regularly deal with, asking you to update or verify your details
Online Relationship Scams
Online Relationship Scams can be very elaborate hoaxes and involve scammers taking advantage of people looking for romantic partners, often via dating websites. They will suggest you move the relationship or conversation away from the app or website to a more private channel, such as SMS or email.
Once they have gained your trust, they will ask you for money, gifts, or your personal details, or to cover the costs of a supposed personal or family emergency.
How to spot this scam:
- They quickly want to move off the website onto other more personal forms of communication
- Their profile on the dating website is not consistent with their social media accounts or what they’ve told you
- They start asking you personal questions about your finances early on in the relationship or conversation
- They may ask you to buy certain goods and send them somewhere, or accept money into your bank account and transfer it somewhere else
Invoice scams involve a scammer, posing as one of your regular suppliers, sending you an invoice request for payment to a new account because the banking details changed, or altered payment details on the invoice.
As the invoice looks legitimate, is sent from a compromised but genuine email address, and is made to look like someone you know, they can be harder to identify.
How to spot this scam:
- The supplier has provided new bank account details
- The supplier has asked you to cancel the most recent payment and send funds to a new account
- Urgent payment is requested
- The payment details on the invoice have been altered
- Be wary of invoices from a supplier you haven’t dealt with in a while, or a larger payment amount than usual
Payroll scams involve scammers impersonating employees, and sending an email from a legitimate but compromised email address, or a message via social media, to their employer requesting an update to their bank account details.
How to spot this scam:
- The sender’s email address looks very similar to the staff members, but with a slight variation, for example the addition of numbers at the end
- Unusual message or request to change account details or payment to a new bank account
How you can protect yourself from Scams & Fraud
Phishing fraud, identity theft and other forms of cybercrime:
- Exercise caution. If an email or SMS appears suspicious, don’t reply or click on any of the links
- Always set a strong, unique, two-factor authentication password on your accounts
- Frequently check your bank accounts for any unusual activity or unauthorised transactions
- Use two-factor authentication on email and banking accounts
- Don’t open attachments from people you don’t know
- If you are unsure whether the SMS or email is genuine, login through your usual method, not the link provided
- Never provide your identification numbers or documents to unverified third parties
- Secure your networks and devices with anti-virus software and a good firewall
- Avoid using public computers or WI-FI hotspots to access or provide personal information
- Be careful about how much personal information you share on your social media accounts
- Be wary when receiving unsolicited emails, or phone calls
- Research before you commit to any investments, and take the time to seek independent professional, financial or legal advice (eg. Who owns the company, how has it recently performed on the stock exchange, does it have a financial services licence?)
- Take time to understand a company’s business and its products or services before investing
- Do not be pressured to make a quick decision about your money or investments, and don’t commit to an investment on the spot
- Be wary of offshore investments. If something goes wrong, it’s harder to trace money sent abroad
- Look out for grammatical mistakes in the email address, recipient name or website
- Check the payment details against a previous payment record and look out for any changes
- Contact your vendor to verify the change using a phone number you already have on file. Don’t rely on the contact details on the invoice
- Try to limit the number of people in your business who are authorised to make orders or pay invoices.Consider having an extra person to approve payments to new accounts or for larger transactions
- Be cautious about how you contact a business. The best defence is to assume the email is untrustworthy and to contact the business directly through channels you trust
Online Relationship Scams:
- Watch out for “cut and paste” dating/social media profiles. Do an internet search of different elements of the person to help determine if they are who they say they are
- Be on alert for grammar mistakes or inconsistencies in the stories of people you speak to online
- Be wary of any requests for financial assistance
- Establish a communication line using video calls such as Skype, Facetime or Zoom if you develop a relationship with someone online