Fraudsters and swindlers the world over have Australians squarely in their sights. We are regularly being ripped off by the classic cons, like Nigerian letter scams, and increasingly falling victim to new pitfalls like online shopping. Thankfully, it is older Australians, who can ill-afford to lose their life savings, who are more likely to outsmart the crooks.

Principal Criminologist at the Australian Institute of Criminology Dr Russell Smith said that, far from the stereotype of the vulnerable older victim who writes away for quick riches, the reality is that young people are more likely to get caught out.

“Young people seem to be responding more readily than older age groups. Older people, that’s the 55 plus age category, seem to be more circumspect in getting involved,” he says. “Whereas some of the younger people, particularly those who have been contacted on social media or through smartphones, are more willing to take risks and respond straight away to invitations.”

But for the older victims who do accept a scam invitation, the results can be devastating. With their best earning years behind them, and often a reticence to tell the police for fear of embarrassment, the effects of losing a large chunk of savings can be irreparable, and go unreported.

Despite the supposed gullibility of young people, there seems to be no particularly preferred target for scammers. Anyone with money and a generous helping of greed and/or gullibility is in danger of being fleeced.

“The scams are targeting almost everyone. They’re pretty undiscriminating in who they’re looking for,” says Dr Smith. “People are receiving scam invitations pretty broadly across the whole range of demographics.”

According to Scam Watch, an estimated $93 million was lost to scammers in 2012 based on reports from those duped. While the final tally for 2013 is yet to be released, a staggering $24.4 million is already expected to have been lost to advanced fee fraud (otherwise known as the Nigerian 419 scam) alone.

Australians have long been the prey of international scams, but the increasing interconnectedness of the web is shortening the distance, and decreasing the cost, of reaching down under. The majority of scammers launch their attacks from Eastern Europe, China and the US, based on information from the Australian Institute of Criminology.

The Australian Federal Police confirms that foreign attacks are flooding in.

AFP spokesperson Julie Hope explains that “due to the borderless nature of global communication mediums such as the internet and telephones, unwanted contact can occur from anywhere in the world”.

Of course, not all scammers are located overseas. It’s no surprise that some homegrown ne’er-do-wells are attracted to the scamming trade by the promise of a quick ill-gotten buck. But Dr Smith says a worrying new cycle of offending, where victims become perpetrators, is also on the rise.

“There have been victims of overseas scammers in Australia who’ve then used the same strategy to try to recoup some of their losses,” he says, explaining that this is because “people realise how relatively easy it is to perpetrate a fraud like that”.

There is a dizzying array of deceitful tricks and schemes. Let’s take a look at the most common scams so you can avoid becoming one of the 8000 reported victims in 2012.

1. Romantic and dating scams

The largest chunk of losses in 2012 was borne by lonely hearts. Romantic scammers, who often pretend to be cash-strapped love interests in need of funds to migrate to Australia, stole an estimated $23.3 million.

Project Sunbird in Western Australia investigates money transfers to Africa, and contacts those it thinks might be falling victim to these scams. A similar project fraud prevention unit also exists with the Queensland Police.

But even when presented with the facts, those with an emotional attachment to their scammer are often the hardest to help. According to Dr Smith, these victims are “very vulnerable and also very unwilling to listen to sound advice from relatives and police and others who try to tell them that what they’re doing is not in their best interests”.

“Some people are just unwilling to take the advice on board,” he says.

2. Online auction and shopping scams

Overpayment scams are popular in online marketplaces such as Ebay. An overseas buyer will offer to buy your listed item, then ‘accidentally’ pay too much. You refund the excess amount, and his bogusly overpaid cheque then bounces.

The risk of these types of scam are increasing as we buy more expensive items online, says Dr Smith.

“People are now buying cars and overseas holidays, quite high value goods and services from online websites. So the risk of losing large amounts of money is increasing. And I think that accounts for some of the stats that are out there of the large losses being lost by people,” he says.

In 2012, online shoppers reported $4 million in losses to these and similar types of fraud. The increasing presence of all age groups in social media, coupled with a newfound willingness to buy and sell online, is causing a boom in the number of online traps, although young people seem more comfortable with taking the digital bait.

3. Fake lotteries and sweepstakes

Phony lotteries and sweepstakes are also popular crimes of persuasion, with $2.6 million lost in 2012 by those willing to take a gamble on getting rich.

4. Cybercrime

Computer hackers raked in $1.3 million from Australians in 2012. While many of these attacks are targeted directly at financial institutions, the average computer user can still help themselves by watching their account balances for suspicious transactions and using strong passwords.

Stuart Wood, head of customer profiling and monitoring services, financial crime at NAB, cautions that these evolving threats require constant vigilance.

“Organisations can’t afford to sit still on web-based threats,” he says. “NAB is continually updating its approach to keep on the front foot.”

5. Banking fraud

Various types of white-collar crime, including identity theft, card misuse, phony cheques, and card skimming (where the information contained on the magnetic strip of your card is reproduced) threaten the big banks, where most Australians store their money.

Obviously, digital methods are on the rise, but phony cheques and the theft of credit cards from letterboxes are also less high-tech crimes that you need to guard against.

It’s even possible for dishonest checkout chicks and chappies to overcharge your card when they input the price into the EFTPOS machine, so be sure to ask for your receipt.

Wood says that fraud involving stolen credit and debit card details increased last year by five per cent.

“It’s important to protect your cards by storing them in a secure place, locking your letterbox and being vigilant about protecting your PIN.  Never write it down or store it in your wallet, phone, tablet or other personal digital assistant. Keep it confidential. If your card is lost or stolen, report it immediately to your bank,” he says.

Some NAB customers have in recent months been sent fake emails pretending to be from the bank as a way to infect their computers with viruses. And NAB is not the only victim, with large companies regularly falling prey to emails that rip off their corporate name and logo. These are sent in huge numbers to random email addresses on the off chance that they will hit the jackpot: an unobservant customer.

“Remember a bank will never ask for your account details on email,” says Wood.

Dr Smith predicts that the banking sector will continue to face these and other challenges.

“Some of the new payment systems, such as contactless cards, have the potential to cause problems in the future,” he says. “At the moment, they’re restricted to relatively low value transactions, but I’m sure over time those ceilings will increase, which creates opportunities for those who have stolen the card to make use of it straight away without even having to get a PIN to use it.”

Reassuringly, banking customers are not liable for unauthorised transactions when they clearly aren’t at fault. Customers who have received a suspicious email can generally report the incident to their bank through a dedicated fraud hotline and/or email address.

6. The classic scams

While high tech crime is becoming more frequent, the classic scams, such as travelling conmen, are still occurring.

“The tried and true methods of dishonesty, such as door-to-door sales, home roof repairs and even postal scam invitations, are still present,” says Dr Smith, who warns that high tech prevention methods may actually result in a resurgence of these timeworn schemes.

“If computer security becomes more effective and efficient, criminals will often revert to some of the older strategies which don’t rely on computing,” he adds.

7. Investment scams targeting small businesses

Small business owners are particularly at risk of sham investments, such as pyramid schemes, that promise quick and enormous returns.

“Often small business people will become involved in taking a few risks to try and get their business out of financial problems or to increase their profits. And those risks turn out to be dangerous,” says Dr Smith, who estimates that some of the larger sums are lost to these types of investment fraud.

8. Unnecessary warranties

Some of the extended warranties offered by big retailers can also be characterised as scams, since you often have the same or similar rights under the law.

You can find out more about your rights as a consumer on the website of the Australian Consumer & Consumer Commission.

Keep in mind that some warranties encompass circumstances that the law doesn’t cover – such as when you crack the screen of your iPhone during a big night out.

What should we do?

Ms Hope says common sense is the key to avoiding financial scams.

“If it sounds too good to be true, it probably is,” she says.

“Beware of products or schemes that claim to guarantee income or winnings.”

Below are statistics from a 2012 survey conducted by the Australian Institute of Criminology showing that respondents aged 55 to 64 are less likely to be victimised than every other age group except 25 to 34 year olds.

Over 65 – 16.5% of victims
35 to 44 – 16.5%
45 to 54 – 16.4%
18 to 24 – 16.3%
17 and under – 13.9%
55 to 64 – 13.1%
25 to 34 – 10.6%

If you suspect a scam you should report it to SCAM WATCH via their website (www.scamwatch.gov.au) or on 1300 795 995. Financial losses should also be reported to your local police and/or your bank.