How to spot a scammer

The truth is, even the most intelligent people can get caught out by a scam. People are constantly coming up with new and cunning ways to steal and cheat their way into taking your money or personal details.

So what are the signs and how can you reduce the risk of this happening to you?

Maaaa-te, trust me.

Scammers rely on building trust and developing a friendship with you, so you are more likely to listen to them and go along with their suggestions. They can be very persuasive and use some tricky psychological tactics to make you part with your money. Some may offer a free gift or assistance to make you feel obliged to return the favor.

When I was the director of the Bureau of Financial Trading...

Scammers are not afraid to big-note themselves and will often say they are approved or associated with another reputable organisation or government agency to convince you of their legitimacy. Chances are you will have never heard of them, but it does sounds impressive. They might also say they are a professional broker, portfolio manager or investment dealer. Even if they sound professional and have bright and shiny brochures to send you, if in doubt, check the ASIC Fake regulator and exchanges register.

If it sounds too good to be true, it probably is.

So you are offered an incredible deal that promises great returns with very little or no risk. You ask yourself, is this too good to be true? It probably is. Do your homework, ask lots of questions and trust your instincts.

Long and persistent phone calls.

Investment scammers are known to be based overseas as their activities are illegal in Australia and ASIC does not have jurisdiction to prosecute them.

Callers are trained well and have tight scripts to follow when making scam calls. If you take the initial bait you are likely to be transferred to another more senior person to close the deal. If the person you are initially speaking with has trouble dealing with your questions, this could well be a red flag.

The other tactic scammers use while on the phone is to just keep talking! Once you agree to one thing they say, you are likely to feel compelled to agree with the next as it may appear you are going back on your word. Also, scammers won’t take no for an answer. So if you find yourself in this position, it’s time to end the call and get back to business.

Finally, be aware that there are restrictions on when telemarketers can contact you. Government industry standards dictate that a telemarketer must not call or attempt to call you at the following times:

Weekdays - Before 9am or after 8pm

Saturdays - Before 9am or after 5pm

Sundays - Calls prohibited

National public holidays - Calls prohibited

If you suspect you are dealing with a scammer check the ASIC website to search their list of known unlicenced companies or report a scammer by going to Scamwatch.