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Australians scammed a record $851million. Beware of this scam in 2022

In spite of the many warning signs on how to identify an investment fraud, a lot more people fall to scam on the regular. You can’t always blame the victims, as scammers are becoming sophisticated. Nonetheless, some people may actually know when a scheme is a scam but shrug off advice with the believe that they can cash out before the bubble burst. Most often than not, they fall victims.

The Targeting Scams Report 2020, as reported by Scamwatch revealed that Australians lost a staggering $851 million in 2020 alone. It was a combined data from Scamwatch, ReportCyber, other government agencies, 10 banks and financial intermediaries, and based on more than 444,000 reports. Break down of figures:

“Investment scams accounted for the biggest losses, with $328million, and made up more than a third of total losses. Romance scams were the next biggest category, costing Australians $131 million, while payment redirection scams resulted in $128million losses. Shopping scams accounted for $62million in scam.”

With this statistic in mind, you may want to ask; what are the common scams in 2022? Here are the most common scams you should be;

  • Event Scam

Scam artists are professionals and smart, and continually find ways to steal. Global events affect oil prices, exchange rates, stock prices and so on. Scammers take advantage of these global events and breaking news to con potential investors with the promise of high returns.

For instance, it is reported that during the Covid-19 pandemic people were scammed by fake companies that demanded advanced payments to supply facemasks, detectors and sanitizers. The fraudsters pried on the vulnerability and desperation of people, collected their monies and vanished.

Beware: As the world donates to support victims of the war in Ukraine, scammers may equally take advantage and present false information and graphics to solicit funds. So, when unexpected events happen, you must as well be vigilant about your finances.

  • Insurance Scam

It is estimated that; the average American family loses between $400 to $700 in insurance premium fraud. That is more than $40 billion per year. Insurance fraud occurs when a person makes a claim for an insurance that they aren’t entitled to or someone is knowingly denied a benefit that is due them.

The most common insurance fraud is premium diversion; this is when an insurance agent collects and embezzles your premiums. Instead of paying the premiums to the underwriter, they divert it to their personal accounts. With this staggering amount lost to insurance fraud, you might want to be sure if an agent is licensed or from a genuine insurance firm before paying premiums.

  • Fundraising Scam

Here, fraudsters use fake videos and pictures to deceive people about a health condition of someone, or certain projects in developing countries that need funds. Whiles some of these may be legitimate, many are fake. There are registered and established NGOs that raise funds to support projects from time to time.

Sometimes, what fraudsters do it that, they search for genuine call for funds, and change the payments channels to their accounts. This is very common on social media.

When you want to donate to a health course or assist a project, research about its authencity and make your donation through the appropriate channels. Otherwise, you may be paying the vacation expenses of a scammer somewhere in the world.

  • Ponzi Scheme

Ponzi scheme was created by the American, Charles Ponzi in the early 1900s. He collected money from investors and guaranteed a 50 percent return on their investment in postal coupons. Although he was able to pay the early investors some interests, the scheme collapsed when he was unable to pay later investors.How does Ponzi Schemes work?

The scheme is such that, early investors are paid with the investments of later investors. It promises high returns to lure you to invest. Usually, you will notice interest payouts in the shortest time after investing. Scam artists use this to create the ‘feel good’ factor and then encourage you to recommend it to friends and families to also invest.

These scammers will publish fake reports to show how the investments are growing, generally to make others feel they are missing out. The scheme eventually collapses when the fraudsters abscond with the investments or the recruitment of new investors slow down.

  • Romance Scam

Romance scam happens when a scammer lures its victim with a false or misleading relationship, usually with the intention to steal their money. Online dating scams have existed for a long time and have recently been more popular with the movie “The Tinder Swindler”. How does online dating scam work?

The scam artists create fake profiles on a legit dating site, App or social media, usually with a stock of ‘well-taken’ photos or the identities of famous people. When there is match on the dating App or you connect with them on social media, they will initiate a conversation and overtime, ask you to chat off the dating App or website.

They will pester you with ‘sweet’ messages in an attempt to gain your trust and interest. In a short period, they will express strong affection and emotions towards you. When trust is established, they will try to talk you into a certain investment opportunity that has worked for them, a family emergency that needs money or even ask you for money to buy plane ticket to come visit. Most often, when you send the money, the scammers would cease all communication with you and that would be the end of the fantasy and your money.

  • Pyramid Scheme

These scammers do well to provide early investors with positive experience, brochures and publicity materials usually presenting false information. With pyramid scheme, participants who are also victims are persuaded to recruit more participants with the hope of earning commission on the number of recruits.

In most cases, there are no real products sold but the fraudsters would go any length to make you believe that it is legit. You see, those on top of the food chain, always get their bigger bite and the late bees little, if any at all.

Imagine if one participant has to recruit 5 other participants, and they have to also recruit 5 participants each. Count this 10 layers downline and you would realize that it is mathethically impossible to recoup your investments or make profits. Eventually, some participants may get tired and fell. Scam artist know this.

Moving forward, the investments you make should never be based on emotions, sales pitches, personalities, or fancy websites. Your decisions should be rather rational, objective and prudent.

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