Australians lost a staggering $3 billion to scammers last year, surpassing any previous year. That's equivalent to the cost of rebuildingthree new hospitals. The latestTargeting Scams report from the Australian Competition and Consumer Commission (ACCC)highlights the urgency of the issue. In 2022, investment scams accounted for the highest losses at $1.5 billion, followed by remote access scams ($229 million) and payment redirection scams ($224 million). Small and micro businesses experienced a substantial 95 per cent increase in losses, reaching $13.7 million, primarily due to payment redirection scams. Overall, there was a 73 per cent rise in scam losses across the Australian business community, totalling $23.2 million, underscoring the urgency to understand the reasons behind scam victimisation and implement proactive measures against fraud. In an interview with the UNSW Business School,Dr Kam-Fung (Henry) Cheung, Lecturer in the School of Information Systems and Technology Management (ISTM), andShesha J. Maheshwari, a research student in the School of ISTM, emphasisethe importance of understanding the psychological factors that make people vulnerable to scams. The experts sayfinancial desperation and a lack of awareness about evolving scam techniques contribute to why many individuals today are being taken in byscams. According to Dr Cheung and Ms Maheshwari, there are six key reasons people fall victim to scams. Dr Cheung explainsthat awareness is a shield against scams that equips individuals with the knowledge to identify and avoid fraudulent activities. “It promotes a vigilant mindset that is essential in today's world where scams continue to evolve and adapt to changing circ*mstances,” he says. But it is also crucial to remember that anyone can fall victim to a scam regardless of their age, education, or background, addsMs Maheshwari, whose work focuses on phishing attacks with a particular focus on smishing attacks – a type of phishing attack that is conducted via Short Message Service (SMS) or instant messaging on a mobile device."Scammers are skilled at exploiting vulnerabilities and manipulating people's emotions and trust,” she says. Ms Maheshwari also notesshe has observed younger generations, driven by curiosity and a propensity for risk-taking, often hold the belief that scams will not affect them personally, which renders them more vulnerable. To promote online safety, she suggestsa shift in mindset from “it won't happen to me” to “it could happen to me, so I must remain aware and vigilant.” She says: “Awareness and vigilance play an important role in safeguarding against frauds and scams. Staying informed and maintaining a sceptical mindset empower individuals to make informed decisions and protect themselves from falling victim to scams.” Stay cautious with emails, especially from unfamiliar sources or seeking personal/financial data; be wary of typos, suspicious links, and mismatched email addresses. Photo: Getty According to Dr Cheung and Ms Maheshwari, falling victim to scams does not reflect personal weakness or naivety, as scammers are highly skilled manipulators, capable of deceiving anyone. And to better protect themselves against potential scams, individuals can take the following precautions. In addition to these proactive measures, the Australian government and ACCC have taken steps to address the issue of scams. Establishing the National Anti-Scams Centre, launched July 1, 2023, is a significant initiative to combat scams. Over the next three years, the centre will build its information-sharing capabilities and bring together government and private sector experts to tackle harmful scams head-on. Finally, Dr Cheung and Ms Maheshwarireiteratethat falling for a scam doesn't reflect a personal weakness or naivety. “Highly skilled scammers are manipulators who exploit psychological vulnerabilities and use sophisticated tactics to deceive people from all walks of life, including highly educated and cautious individuals. “Acknowledging this fact can help victims overcome any feelings of self-blame or shame and instead focus on reporting the scam, seeking support, and learning from the experience to prevent future occurrences.” To report a scam or seek assistance, you can visit theNational Scam Centre website. You can also report scams toReportCyberandScamWatch.Why do people fall for scams?
How to avoid falling victim to scams
How do I report being the victim of a scam?
FAQs
Why do people fall for scams so easily? ›
Emotional triggers: Scammers frequently exploit emotional triggers to manipulate their targets. By creating a sense of urgency, fear, or excitement, scammers impair rational thinking and compel individuals to make impulsive decisions.
What makes someone vulnerable to scams? ›Although anyone can fall prey to a scam, regardless of age, gender, education or economic background, older people are often targeted by particular scams, such as mail or investment scams, and may be especially at risk because of their circ*mstances – being isolated or lonely, or living with dementia or cognitive ...
How do people fall for phishing scams? ›The Impact of Social Proof and Urgency in Decision-Making
The perception that others are complying can create a false sense of security and legitimacy, leading more individuals to fall for the scam.
Do your research before agreeing to anything. Use external sources, such as online forums or news articles, to check the security and legitimacy of websites, traders and payment methods. Check to see whether a physical business location or a phone number has been provided and check if these are real.
What kind of person falls for scams? ›Less-Educated and Lower-Income Adults Fall Prey Most
Adults with no college education are about twice as likely as college graduates to say they have personally been victimized by a scam in the past year (11% vs.
Limited information: Intelligent people can fall for scams when they lack specific knowledge about a particular area. For example, someone well-versed in science might not be knowledgeable about financial scams.
How do I stop falling victim to scams? ›Check your privacy settings regularly to make sure they're up to date. If you receive a message from someone you know asking for money, double-check with that person another way, like by calling them. Don't share personal information, or information that could help a scammer.
What age group falls for the most scams? ›According to the Federal Trade Commission (FTC), adults ages 18 to 59 are more likely to report losing money to scams, with online-shopping fraud, cryptocurrency investment scams and job scams being the most common. In 2021, the median loss for such scams was $500.
Who is most at risk of scams? ›Older people suffered the greatest harm at the hands of scammers. People over the age of 65 were the only age group to experience an increase in reported losses. Losses for people over the age of 65 increased by 13.3 per cent in 2023 to $120 million. All other age groups reported a decrease in losses.
Why are there more scams now? ›With the rise of the digital economy, scammers now reach targets by social media and text, as well as phone and email. Online payment platforms, apps, and marketplaces have also increased opportunities. Still, many of their tactics and strategies are similar.
Who are typical victims of phishing? ›
Millennials and Gen-Z internet users (18-40 year olds) are most likely to fall victim to phishing attacks – 23% compared to 19% of Generation X internet users (41-55 year olds). 90% of phishing attacks sent via messaging apps are sent through WhatsApp. The next highest percentage is Telegram, with 5.04%.
Should I be worried if a scammer has my address? ›With your name and address:
Scammers can submit a change-of-address form to the USPS in your name. Once processed, your mail will be diverted to the new address. This allows fraudsters unfettered access your bank statements, tax documents, and ID renewals, along with any other items sent to you in the mail.
Scammers often come up with various reasons, such as emergencies, medical expenses, or travel costs. Never send money to someone you've only met online.
How do you outwit a scammer? ›- Don't send any more money. Block all contact from the scammer.
- Contact your bank or financial institution immediately to report the scam. Ask them to stop any transactions.
- Warn your family and friends about the scam, so they can watch out for potential follow up scams.
STOP CONTACT WITH THE SCAMMER.
Hang up the phone. Do not reply to emails, messages, or letters that the scammer sends. Do not make any more payments to the scammer. Beware of additional scammers who may contact you claiming they can help you get your lost money back.
Get-rich-quick schemes prey on common human vulnerabilities like fear, greed, arrogance and the need to belong. Constant barrage of messages today intensifies the fear of missing out (FOMO) when flashy offers present illusion that everyone else but you rapidly achieves wealth and status this way.
Who are most likely to be victims of scams? ›People aged 35-44 were the most likely to experience fraud (23%). The most common type of fraud victims experienced was “push-payment fraud (40%), where the victim has played an inadvertent role in the fraud.
Why are so many scams likely? ›Because phone numbers are relatively easy for scammers to access. Your number may be on a data broker list that's in the wrong hands. It may have been leaked in a data breach. Or fraudsters may have peddled information that they collected about you on Dark Web marketplaces.