ReadyTechGo featured on ABC Life: https://www.abc.net.au/life/how-to-spot-an-online-scam/11422230
By Patrick Wright and Grace Jennings-Edquist
More than ever, we’re doing our buying and selling online. And more than ever, we’re getting ripped off by scammers.
In 2019, online scams and schemes are expected to cost Australians more than half a billion dollars for the first time — and even tech-savvy people are being caught out.
“We’ve had clients who have been scammed lots of money, and they’re sophisticated, smart, hard-working people. But in that vulnerable moment, they fell for it,” says technology trainer Lisa Du.
So how can you stay out of trouble? How do scammers try to catch us out? And how can we teach our children to stay safe online?
The anatomy of a scam
There are countless online scams, which tend to fall into several categories. Here are five of the most common.
- Classified advertisement scams. Found on sites like Gumtree, Facebook or eBay. These often involve the use of fake receipts or transactions to obtain a product without payment.
- Fake online stores can see people pay for items they never receive.
- Pyramid schemes like the Loom scam on Instagram require you to pay a fee to participate, then find other people to “invest” after you have. Despite promises of riches, these schemes inevitably collapse when new participants can’t be found.
- Investment or gambling scams promise guaranteed profits thanks to special software or a “system”. By the time you cotton on and ask for a refund, your money is long gone.
- Dating or romance scams can see you fleeced by scammers posing on dating websites or social media networks. They generally work over long periods of time, with the scammer building online “relationships” before requesting money.
Buying and selling online? Watch out for common red flags of a scam
So, how can you tell if you’re being conned? It isn’t easy, says Lisa Du, who recently had a run-in with a scammer while selling a mobile phone.
Within an hour of posting an ad on a classifieds website, she had a prospective buyer message her.
“At first, I was so excited. I replied and they gave me their email address,” she says. “Then I thought about it, and wondered why they couldn’t keep communicating through text message.”
Then she noticed a number of other red flags.
The woman said she worked on an oil rig with bad reception, which sounded suspicious. She wasn’t easily contactable, and offered to pick up the phone via courier without an inspection, which seemed strange.
It just didn’t add up, and Lisa knew there was something going on.
“Normally what [scammers] do is send you a fake screenshot with confirmation about making a payment, or they’ll send you a fake receipt,” she says.
“If you’re time-poor, or if you’re not looking carefully, it looks very much like a real receipt. Then they use a courier, and you’ve given them that item for free.”
The lesson? As always, if something sounds too good to be true, it probably is.
“If you are going to buy a phone from Gumtree or Facebook Marketplace, try and meet the seller in person, and try to do it in a public place,” she says.
“It might be outside a bank, outside a petrol station, somewhere with cameras. And don’t transfer the money to an unknown person.”
Staying safe while shopping online
Laura Higgins is senior executive leader at ASIC MoneySmart. She says when it comes to financial literacy, scam detection is an increasingly important skill.
“Now to be financially capable, it’s about problem-solving: How do you identify a scam? It’s about asking questions and thinking about whether this opportunity makes sense to you,” she says.
When it comes to online shopping, the task isn’t as easy as it might seem. Even the closed padlock symbol on a web browser might not be a great indicator of trustworthiness.
Here are some of Lisa Du’s tips for staying safe when purchasing from online stores.
- Beware of buying a product directly from a link you find on social media. Instead, try to find the actual website of the business. Some Instagram posts linking to fake online stores might have thousands of likes and appear legitimate until you click through to a dodgy website.
- If the business is Australian, they’ll need to have an ABN. You can look up a business’s ABN online for free. If there’s no ABN — or the business is registered under another person’s name, for instance — it could be a red flag.
- Some scammers on Facebook might point you to a business with a real address to appear legitimate. If you can, try to visit the shop yourself rather than sending money to a stranger online. Otherwise, you could try to look up the business using an online mapping service.
‘Sneaky’ terms and conditions
Another way people can get caught out is by fees and charges hidden in the terms and conditions of legitimate online subscriptions and purchases.
If you’re a parent, take note. Children and teenagers can often get caught out when signing up for “free trials” that require recurring payments after the trial period expires.
Is your shopping habit a problem?
Hands holding a credit card over a laptop for a story about how to control your expensive online shopping habits.
Do you find yourself regularly browsing the shops on your lunch break or mindlessly scrolling online stores at night?Teaching your kids to scrutinise and question those online deals that seem too good to be true “means really preparing our children to be an advocate for themselves as they get older”, says Ms Higgins.
“You wouldn’t randomly hand someone your credit card in a shopping mall, and you have to treat the internet in the same way,” she says.
Depending on your child’s age, you might want to monitor or even restrict purchases from devices that could have stored credit card information. (For instance, an app store on your phone or tablet.)
“You also may want to start off where you have full control, and start to relinquish control as they mature and demonstrate certain behaviours,” says Dante De Gori, the chief executive officer of the Financial Planning Association of Australia.
If your child wants a music streaming subscription, you could have them link it to your own bank account and repay you each month as a trial. Over time, the goal is for them to look after these purchases themselves.
The important thing is for kids to understand that once the money is spent, it’s spent; whether it’s online games or mobile phone contracts, they shouldn’t be entering into a credit arrangement to fund online purchases.
“The simple lesson I think most of us growing up were taught was ‘Don’t spend more than you earn’,” says Mr De Gori.
“And I think that principle is very difficult in a digital, invisible money world.”