From super to puppy scams, what you need to know

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Scammers want your money and they want your identity too. That's one of the key messages from the Australian Competition and Consumer Commission (ACCC) during Scams Awareness Week.

The commission says they've seen a 55% increase in cases of identity theft in the last 12 months and scammers have ramped up their activity during COVID-19.

"Pretty much every scam we see now, the scammers are not only trying to get people's money but they're trying to get their personal details," says ACCC deputy chair Delia Rickard.

Super scams are evolving

While there has always been superannuation scams, Rickard says the kinds of super scams the ACCC is seeing has shifted.

In the past, most super scams were around getting people to start a self-managed super fund (SMSF). Once the scammer had convinced their victim to start an SMSF, they could then trick them into "investing" the money in a way that would give the scammer access.

But now, with the government's early release of super measures in place, scammers have adapted and changed tact.

Rickard says consumers need to be wary of anything online that asks them for their super details and especially anything that asks for their MyGov details.

"The scammers are getting this information in a variety of ways," says Rickard.

She is aware of scammers cold calling people and claiming that they can help them access their super early.

For vulnerable people, who might not be computer literate and able to easily navigate MyGov to apply for the early release of super, the scams can be convincing.

Rickard recalls one scam which recently went around on Facebook and Instagram. The scammers created a convincing graphic claiming that Coles, Woolworths and Aldi wanted to help people suffering financial hardship as a result of COVID-19 by giving them gift cards. All people had to do to get a gift card was fill in an online survey which included a few questions about their super.

It's too early to say how much money has been lost in the early release of super scams, but Rickard has some concerns that people may be reluctant to come forward.

"A lot of people are too embarrassed to report," she says. "But when you do report you help yourself and you help other people."

Scammers are targeting indigenous Australians

The Australian Securities and Investments Commission (ASIC) says there are costly effects of consumers giving out personal details over the phone and email.

The regulator says there were 2767 scam reports from indigenous consumers to Scamwatch in 2019, a 14% increase from 2018. The average loss in 2019 was $4858.

The greatest losses were to investment scams at $1.1 million. False billing came in at more than $63,000. Indigenous men reported the most losses to investment scams with $341,797 lost, followed closely by women at $339,220.

ASIC says phone calls were the top contact method by scammers with 756 reports and $632,049 reported lost. This was followed by email at 21% with 387 reports and $155,925 lost.

ASIC recommends Indigenous consumers be cautious before sharing personal details over the phone and to hang up and call back using details from the caller's official website.

"If consumers are contacted by someone offering an investment and ways to make easy money, consumers should ask for more information about the company, and research whether the company is legitimate," says ASIC.

In addition, consumers are urged to take time to think things through and not be pressured into sharing personal information or investing money.

Puppy scams also on the rise

Not all scams are related to financial services companies. Pet Insurance Australia says more than $1 million has been lost to puppy scams this year alone.

The insurer also advises all future pet owners to be sceptical, and not to shy away from asking as many questions as possible. A quality breeder will have no problem showcasing the breeding establishment they run to a prospective puppy or kitten owner.

"Many scams have proven to be very believable and professional, with beautiful looking websites," says Nadia Crighton from Pet Insurance Australia.

"Reverse checking images, double-checking breed registering information, and also speaking with the breeders' affiliated club can help protect you from becoming the next victim."

Crighton's tips for avoiding puppy or kitten scams include:

  • Check your breeders' prefix and membership registration number.
  • Call the breeder's affiliated club and ask lots of questions.
  • Check images by using the Google reverse image searcher and double-check they are not stolen from another website.
  • Ask for images of different angles and newspaper ads with dates shown. 
  • Check emails and all correspondence for grammatical errors.
  • Additional and surprise costs are a major red flag.
  • If possible - meet the breeder in person or organize a Zoom meeting.
  • Ask about the pups/kittens' mum and dad - their pedigree and show names.
  • Be patient - many breeders have long waiting lists.

The financial effect of scams

The ACCC's Delia Rickard says last year Australians lost a reported $26 million in investment scams - and the actual figure is probably much higher.

She wants to warn consumers to be particularly wary of bitcoin and cryptocurrency schemes, saying she has seen many of these collapse and turn out to be Ponzi schemes.

"I have seen so many scams in cryptocurrencies. I would honestly say, "just don't go there"," she says.

"A lot of people start out sensibly just putting a bit of money in and then when they're seeing returns from that or able to pull that out with no issues then they put more in. Then they recommend it to their friends and family.

Unfortunately, by the time these Ponzi schemes fall apart, people have often piled more money in - believing that they would be able to pull it out as they had in the early days.

For more information, visit Scamwatch.

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Darren Snyder was the managing editor of Money magazine from March 2019 to November 2020. Prior to that he was editor of Financial Standard.

Elizabeth McArthur was a journalist at Financial Standard from March 2019 to April 2022. She has a bachelor's degree in journalism from UTS and a master's in creative writing from Melbourne University.

Annabelle Dickson was a Financial Standard journalist from July 2020 to November 2021. She previously worked at The Inside Investor and The Inside Adviser. She holds a Bachelor of Arts in Communication (Journalism) from The University of Technology Sydney.

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