It is an increasing concern for many to see the continued rise of financial scams. Even with a concerted effort from banks and regulators, the Australian Competition and Consumer Commission released a report saying there's been an 80% increase in scams since 2021 to a record $3 billion, which includes $377 million lost in investment scams alone (see graph, page 46).
A common misconception is to think that you must be uneducated, less intelligent or gullible to be caught up in a scam. But this is simply not the case. Many people who are scammed are successful, intelligent individuals. Intelligence is no protection against financial scams because they speak to our emotional brain, not our rational one. The rational brain's job is to explain away the irrational behaviour - something intelligent people are very good at.
Scammers do not target the unintelligent; they prey on the vulnerable.
An executive in a major Australian bank who is tasked with working with vulnerable customers (we need to keep them anonymous for legal reasons) says: "People have very sophisticated ways of justifying or explaining away the transactions, and can get quite hostile when we suggest they may have been taken for a ride. Further to this, once they have been scammed once, we find they are extremely likely to be scammed again."
This initial scam is called a "gateway scam" and is often a small one. Once the scammers recognise that you may be vulnerable, you will find yourself being the target of many others. This further devastates the victims and their families, both psychologically and financially.
This story is from the July 2023 edition of Money Magazine Australia.
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This story is from the July 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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