The types of fraud catching out Australians

A growing number of Australians are falling victim to fraud each year as the techniques employed by cybercriminals become increasingly refined. Understanding common types of fraud, and how to protect yourself from them, is important as their methods become more sophisticated.

In 2021-22, 11% of Australians experienced one or more types of personal fraud – an increase on the 8.5% reported in 2014-15.1 Australians remain a prime target for fraudsters, meaning the risk of a fraud event occurring to you or a loved one is relatively high.

“These criminal syndicate groups tend to target more affluent nations,” says Macquarie Bank’s Head of Financial Crime Intelligence, Stephen Cottell.

“There’s a general perception that Australians are both affable and affluent people,” he said. “It’s almost like a ‘Robin Hood’ mentality.”

 

01 Scams and fraud: understanding the difference

Although the terms ‘scam’ and ‘fraud’ are sometimes used interchangeably, there is a subtle but important distinction between the two.

With a scam, the victim is persuaded to hand their money or information over themselves, typically without any involvement or intervention from their bank, financial institution or trusted professional. An example of this includes an investment scam, in which the scammer lures their victim in with the promise of guaranteed or above-average returns. Unfortunately, it can be difficult to recover funds after they have been stolen. Visit our scams reference guide to learn more about common scams to watch out for and tips on how to avoid them.

Fraud, on the other hand, often occurs without the victim knowing, and with no willing involvement on their part. Victims of fraud can often apply for recovery assistance from their bank or financial institution, though it’s highly dependent on circumstance.

 

02 Three common types of fraud in Australia

Fraudsters need to get a hold of their victims’ banking or personal details to access their finances and siphon their savings. While there are several ways this can be done, the below includes some common types in Australia.

  1. ID takeover

ID takeover is the name given to instances where fraudsters capture enough of their victims’ personal information to, for example, open accounts or access credit facilities in the victim’s name – without their knowledge.

  1. Account takeover

Similar to ID takeover, account takeover attacks involve fraudsters taking control of legitimate accounts, using usernames, passwords or other information they have stolen to gain access.

  1. Card fraud

One of the most well-known types of fraud, card fraud involves someone using your bank or credit card details to make unauthorised transactions. While most people think of card fraud as the result of theft or skimming, fraudsters can also use malware and social engineering to obtain your card details.

 

03 Key warning signs of a fraud event

Despite their best efforts, fraudsters struggle to completely cover their tracks – ultimately, suspicious and unauthorised activity is noticeable. Knowing what to watch out for can make it easier to spot and stop fraud from occurring.

Unexpected charges on your accounts

Fraud ends with money being stolen, which will result in unexpected or unfamiliar charges appearing on credit card bills or bank account statements. Regularly reviewing your bank statements and familiarising yourself with your usual transactions and payees will help you identify fraudulent transactions.

Pushy behaviour

Though commonly associated with scammers, fraudsters may also use high-pressure tactics to get personal and financial information from their targets. Financial services professionals, for example, will generally never try to force abrupt decisions or become aggressive with their customers. This kind of behaviour is a strong indicator that something is wrong.

Unusual activity or instructions

Small changes in the way a bank contacts you are a reliable signal that something is amiss – and that you’re the target of a fraudster, or even a scammer. This could include using email addresses, phone numbers, or web URLs which don’t match with the details available online or in previous interactions, or a bank using an unconventional messaging app to get in touch.

 

04 How to handle suspected fraud event

While not everyone has fallen victim to fraud, Cottell says it’s likely almost every Australian adult has at some point been a target – with many not even realising.

“Everyone should be aware they could be targeted – that is the scale of the problem,” he says. “It’s very hard to find somebody that has not had at least a brush with fraud or a scam.”

Australians can protect themselves before, during, and even after a fraud event. These four steps can help you avoid becoming a fraudster’s next victim.

  1. Good digital hygiene

Creating a unique and strong password for each of your online accounts – including email, social media and banking – is vital to keeping fraudsters at bay. A password manager may support you with this.

Remember, once a fraudster has successfully logged into one of your accounts, they may try the same username/password combination on all your other accounts to see what else they can access.

Further, limit the amount of personal information you have publicly available – many Australians list their birthday on their social media accounts, for example, which is often a security question asked by banks and financial institutions.

Also, try not to keep any important identification documents (such as scanned copies of your passport or birth certificate) saved in your email account either. Leaving sensitive documents in these accounts gives fraudsters an opportunity to steal your identity.

Finally, though it might seem obvious, never share your password with anyone or store it in a place others can find it.

  1. Independently verify claims

If someone claiming to be from your bank or telco is asking you to do something unusual or suspicious, always take a moment to independently verify what they’re saying. Source the organisation’s correct contact details through the web (don’t trust details supplied by your suspicious connection) and reach out to ensure everything is above board.

  1. Focus on authentication

Most Australian banks now offer two-factor authentication services on their accounts, which does what the name suggests – it requires two types of authentication before certain account activity occurs. For example, you may require two-factor authentication when a new payee is added to your bank account.

Often, two-factor authentication relies on text messaging, such as your bank sending you a unique code that you can use to confirm legitimate activity. However, texting is not entirely secure, as phone numbers can be ported – effectively, hacked – by a criminal.

Apps such as Macquarie Authenticator don’t rely on text messaging. Authenticator is linked to your Macquarie digital banking, prompting you to either approve or deny account activity, including payment. It monitors your accounts 24/7, even when travelling or with no mobile reception. This additional layer of security is an important one, allowing you to block fraudulent activity in real time.

  1. Report your experience

Whether or not your money was taken by a fraudster, reporting what happened is usually the most sensible last step. Notifying your bank and the ACCC’s Scamwatch could not only help you get any lost money back, but the information you provide can help authorities catch fraudsters and protect other Australians.

 

Adapted from: https://www.macquarie.com.au/security-and-fraud/fraud/types-of-fraud-catching-out-australians.html

Share Market Falls: The Causes and What to Consider

Headlines about falling markets can be worrying – particularly if you’re approaching retirement. Find out more about the recent causes and what to consider.

After stellar rises in 2021, share markets lost some of their shine in January with steep falls that have attracted plenty of media attention. This is a market correction after a sustained period of share market gains. A few factors have spooked markets, including the prospect of interest rate rises, the ongoing disruption caused by the Omicron variant, and uncertainty about conflict between Russia and Ukraine.

If your super is in a balanced investment option, the falls in the share market are unlikely to be fully reflected in your account balance. That’s because your investments are spread across a range of different types of assets, such as bonds, property and infrastructure – some of which are largely unaffected by the factors behind the share market falls.

There are also good reasons to believe markets are reacting to short-term challenges likely to be resolved relatively quickly. Central banks are committed to a gradual rollout of interest rate rises, the economy is doing well and, despite the challenges of Omicron, we are slowly but surely getting to grips with Coronavirus. As a result, our short-to-medium-term outlook remains positive.

WHAT CAUSED THE SHARE MARKET FALL?

There are a few reasons that the share market has taken a tumble over the past month. These include:

  • The prospect of earlier-than-expected interest rate rises by central banks, both in Australia and overseas. Rising inflation is the driving factor.
  • The Omicron variant, which affected business operations. For example, sick workers resulted in disrupted trucking routes and empty supermarket shelves.
  • Geopolitical uncertainty, including a Russian military build-up on the border with Ukraine.
  • Finally, stock markets have surged over the past 20 months. After such a sustained period of growth, a correction is not unusual.

WHAT DO YOU NEED TO CONSIDER?

As with all investment decisions, there are two key factors you should take into account. First, your risk appetite – how comfortable are you with experiencing falls in your investments? Second, your time horizon – when do you need to withdraw your money?

If the current falls in the share market are making you uncomfortable, it could indicate you are invested in an option that may not match your risk appetite. It could be helpful to speak to a financial adviser, if you don’t have one, to review your different investment options.  If you’d like to talk to someone, please call 0404167989 or email ds@bluerocke.com at Bluerocke Investment Advisers

If your time horizon is longer than the medium term (say, five years), then you may have time to ride out any losses and simply wait for the market to recover. Keep in mind, switching to a more conservative investment option could ‘crystalise’ your losses – turning a paper loss into an actual loss – leaving you with less capital and a lower growth investment.

At times like these, it’s important to keep in mind:

  • Stock market corrections are normal, and can be healthy
  • If you switch to a more conservative option such as cash, you risk locking in your losses
  • Shares have performed well over the long term
  • The economy is strong and unemployment remains low.

WHY MARKET CORRECTIONS ARE NORMAL

It’s impossible to know for certain what the future holds. Nevertheless, it’s important to put the current share market falls in context – they follow 20 months of strong market returns driven by abnormally low interest rates. The reaction of markets in recent weeks is best seen as a return to normality.

We are here to support you and things you can do include:

  • Reading our regular market updates
  • Staying up-to-date with the latest market developments
  • Reviewing your super to ensure it aligns with your risk appetite and financial objectives.

WE’RE HERE TO HELP

As you keep your long-term goals top of mind, remember: we are here to help – with news, insights and helpful resources available on our website,  www bluerocke.com to help keep you up-to-date on the latest.

 

DEV SARKER DIRECTOR

Authorized Representative

FCA, MBA, ADFP

p 1300 71 71 36 | m +614 0416 7989