The worst of the coronavirus crisis may have passed, but the corporate regulator is warning new threats are emerging which could part Australians from their money.
Scams, predatory loans, inadequate hardship provisions and other poor behaviour have cost Australians thousands of dollars since the pandemic struck.
And more Australians could fall victim to bad behaviour and dodgy operators, according to corporate watchdog ASIC.
“At a time when the COVID-19 pandemic is causing significant anxiety for many consumers, there is a greater risk of exploitation by unscrupulous operators,” the regulator cautioned.
“While we recognise that participants in the Australian financial services sector are under enormous pressure at this time, we firmly expect that they continue to act fairly and in the best interest of consumers.”
ASIC chief James Shipton warned those looking to take advantage of customers that the regulator will take “swift enforcement action” to protect Australians.
He also flagged plans to work closely with the financial services industry to minimise harm and ensure businesses behave in a “fair and transparent” manner.
Scams surge as pandemic takes hold
ASIC’s renewed focus on consumer protection comes as more and more Australians fall victim to increasingly costly scams.
The “marked increase” in these scams is even more troubling given so many Australians are battling reduced incomes and financial stress, ASIC said.
Delia Rickard, deputy chair of the ACCC, told The New Daily there has been “a real explosion in scams” so far this year.
“We’re seeing lots of investments scams, a whole bunch of COVID-19 scams – we’ve received about 3000 complaints about scams with a COVID link,” she said.
And the scammers are proving to be “endlessly creative”, finding new and ever more devious ways to steal from unsuspecting Australians.
Most recently, Ms Rickard said, scammers are pretending to be employers, offering jobs to recently dismissed workers.
But the job comes with a catch – before workers can start they need to undergo a $110 coronavirus ‘test’.
Once the money for the test is transferred, the scam employers disappear, leaving unemployed Australians even worse off than before.
“We’ve had a couple of reports of that one this week,” Ms Rickard warned.
Other scammers are stealing sensitive MyGov account data through fake surveys supposedly for supermarkets like Coles and Woolworths.
Hidden among a sea of innocuous questions are several traps laid by scammers to capture vital data they can use to steal superannuation money.
There’s only one sure-fire way to make sure you don’t become the scammers’ next victim, Ms Rickard added:
Always have your guard up.
“Never trust that communication that comes to you unexpectedly is from who it says it’s from.”
Before giving out any information – no matter how frivolous it seems – Ms Rickard said it’s vital to independently verify the identity of the people asking.
Don’t use the contact details supplied to you. Instead, seek the correct contact details and call or email the business or person that initially ‘contacted’ you to make sure the message was authentic.
Desperate Australians risk falling into debt spiral
Scams are not the only worry – rising unemployment and falling wages mean many households can no longer cover their bills.
In desperation, many will max out their credit cards or turn to pay day lenders to keep food on the table and a roof over their – and their family’s – heads.
Unfortunately, these debt-based products could very easily “push them over the financial edge,” National Debt Helpline director of community engagement Maura Angle told The New Daily.
“The problem for many people is they are more tempted to use payday lenders or buy-now-pay-later schemes when they are short of cash and struggling to pay bills.
“If you don’t have your usual income and the bills are piling up, taking out a payday loan or maxing out on your credit cards is going to send you into a debt spiral, which can be hard to get out of.”
Research from the Stop The Debt Trap Alliance – a collection of more than 20 consumer activist groups – found the interest repayments on these short-term loans can amount to as much as 400 per cent per annum.
Repayments are so expensive that many customers are forced to extend their loan or borrow more to stay on top of repayments.
Ms Angle’s advice is to avoid payday lenders or credit cards if you’re struggling with bills or debts.
Instead, try financial counselling – this free service can help consolidate debts, pause repayments, develop payment plans, and help create a practical household budget.