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How to avoid becoming a victim of a scam

Just recently, the NZ Herald reported on elderly victims of a phone scam who lost more than $70,000. Not to mention an Auckland single mum who lost $200,000 to scammers posing as Chinese officials. And sadly, these examples are not unusual. There are scores of other stories to be told with scammers defrauding people of millions of dollars each year.

You may think that you wouldn’t fall for a scam but, contrary to popular belief, scammers don’t just target the gullible. They are becoming increasingly sophisticated and stealthy and there are a number of scams that people fall victim to every day including romance scams, mail fraud, holiday scams, charity scams, advance fee scams, debt settlement and debt relief scams.

There are some scams that are obvious such as the Nigerian prince advising that a distant relative has died and you’re the sole heir to their mega fortune. Of course, all you need to do is pay x-amount up front to release the funds.

Other scams are more elaborate. One popular scam is the investment scam. Victims are convinced to sign up to an investment fund, only to receive a call later from an organisation that has ‘discovered’ the investment scheme and advised the victim that they have been scammed. They then pretend to make an effort at getting the stolen funds back which may include the investor putting in even more money to bait and catch the crooks.

What to look out for

With the number of scams around and the ever-evolving unscrupulous tactics, it is important to know how to spot and protect yourself from these scams:

  • Studies show that the most common type of scams Kiwis fall victim to are romance scams. For this one, the scammer pretends to be in a relationship with someone online for the sole purpose of getting money out of them. This usually entails pretending to be someone they’re not by using photos of people found online. Once trust has been established under false pretense, that is when the trap is sprung, and the fabricated stories begin to con the victim out of their money.
  • Are you being offered money or a prize in exchange for something up front (disguised as a “processing” fee or something similar)? These advance fee scams happen quite often. A scam artist claims that you have been approved for a loan or perhaps won a lottery or contest. The trick of it is that you need to first pay a fee before you can claim your loan or winnings.
  • Imposter scams happen when you are asked for money or sensitive information by someone claiming to be a government official from a legitimate organisation, someone you know like a friend/relative, tech support or someone you’ve only met online. This is another common tactic which can often seem legitimate through relationship building tactics.
  • Are you being asked for your password? This is another one that catches more people than you’d expect. No legitimate company asks for their customers’ or clients’ passwords for their account so never give out a password.
  • If you’re on either end of a transaction (buyer or seller) and the other party is trying to persuade you to complete the transaction outside of the usual online trading or booking website or app then this is a big red flag. Don’t pay outside of the normal processes as this increases your chances of being scammed. Why? When making purchases, scammers usually try to use payment methods that can’t be traced such as pre-loaded debit cards, gift cards, bitcoins, iTunes cards or money transfer systems.

It’s always important to know that regardless of the offer and how good of a deal it may seem, you shouldn’t be afraid to just say no, regardless of the pressure they may put on you to decide right away.

Take time to do your research. Is the company legitimate? Is the person really associated with the organisation as they claim? Did you actually order the product or enter ‘said’ competition? If the company or group someone says they are affiliated with is a legitimate one, a simple option is to contact the organisation directly to check. For this one, you need to ensure you use the contact details listed on their official website or on Google My Business. At no point should you use the one you were given by the person or in the email/method of communication you received.

Scammers are constantly evolving their methods and tactics to make them more difficult to spot so your best defense against becoming a victim is educating yourself on the tactics these scammers use. Know what to look for, do your research and as always, if it sounds too good to be true, it probably is.