5 common scams and how to detect them

From an email promising an extravagant prize to an enticing online offer that seems too good to be true, scams have become an unfortunate reality as we spend more time online. It doesn’t help that many of them are more sophisticated and trickier to detect than ever before.

The good news is that by knowing what some of the most common online scams may look like, it may be possible to detect them and avoid falling into their traps.

Let's explore some of the most common scams and how they can be spotted.

Common scams and what they may look like

While some scams can be spotted easily — like princes in distant lands offering their riches — it’s surprising how far some cybercriminals will go to trick people into handing over their money or personal information. They might pose as a family member, a trusted charity, a financial adviser, or even your government’s tax authority.

From romance scams to retail fraud, scams can happen across almost all industries. Here are some of the most common online scams to be aware of:

Phishing scams

Phishing scams use psychology to trick people into sharing their personal or financial information. In some of the most common phishing emails, fraudsters masquerade as trustworthy entities — such as reputable organisations, banks, or even friends — to induce unsuspecting individuals into divulging sensitive information or unwittingly downloading malicious software.

These tips can help you avoid phishing:

• Be cautious of unsolicited emails or messages, particularly those requesting personal or financial information.
• Verify the authenticity of the sender by independently contacting the organisation through official channels rather than clicking on provided links.
• Pay attention to the website's URL. Look for the secure "https://" prefix (the s in https stands for ‘secure’) and double-check the domain name for any variations or misspellings that could indicate a fake site.
• Be wary of websites that prompt you to enter sensitive information without a legitimate reason or appear unprofessional and poorly designed.
• Report fraudulent websites or suspicious activity related to your PayPal account.

Messaging scams

Also known as “smishing", messaging scams are another type of phishing that occur through text messages, social media platforms, or messaging apps.

In these cases, scammers may employ urgent or alarming scenarios, pretending to be from a bank or a trusted institution, aiming to create a sense of urgency that prompts people to disclose confidential information without proper verification. Not sure if a message is legitimate? Never give out personal or financial information and always act with caution.

Dating and romance scams

As many people seek relationships online, dating scams have become increasingly common. In fact, Australians lost a collective $40 million in 2022 due to romance scams — making it the second largest scam type in the country.¹

By creating fake profiles on dating websites or social media platforms to establish romantic connections, scammers gain trust and affection before asking for money or personal information.

To best avoid online dating scams, people should never share personal details or send money to someone they've met online without verifying their identity.

Insurance scams

Insurance scams can target anyone and might occur across all types of insurance, from travel to health. They may offer bogus insurance policies or fake claims to swindle money from unsuspecting individuals.

For instance, Scamwatch — run by the Australian Competition and Consumer Commission (ACCC) — has received thousands of scam reports related to COVID-19 since the onset of the pandemic, resulting in millions in losses.²

Be sceptical of unsolicited offers and always verify the legitimacy of the insurance provider before sharing any personal or financial information.

Charity scams

Some of the most common fraud schemes come in the form of charity scams. Designed to take advantage of people's goodwill, scammers pretend to represent charitable organisations to collect funds for important causes — from helping people with healthcare issues to saving koalas.

It's a common type of fraud that works by manipulating people’s emotions, so they donate money or provide personal information. To protect against the most popular scams, conduct thorough research into any organisation before donating and only donate via official or trusted channels.

How to spot common scams

Learning how to better detect scams is crucial for online protection. If anyone is trying to gather personal information or ask for money — whether it's to pay a fee or offer something for free — question it.

Most common fraud schemes employ similar tactics. Here are some tips to help spot the most common internet scams:

• Check the email and verify the sender. Most common types of fraud will use email addresses or phone numbers that look like legitimate companies. Look up and visit the company's website or contact them directly to verify the contact information.
• Research the company. If you receive an unsolicited communication, visit their website, use ABN Lookup, or contact the company directly using verified contact information.
• Remember: If something seems too good to be true, it probably is. If you've won something unexpectedly, met your dream partner online (but never met them), or have been approached to take an amazing job, always do some due diligence before providing information or making a payment.

What to do if you think you've spotted a scam

If you think you've encountered a scam, here are some suggested steps:

• Avoid responding to suspicious emails or texts.
• Do not click on any links in emails or messages.
• Never provide personal information, like credit cards, banking details, or passwords.

• Report the scam to the ACCC's Scamwatch.

• Get in touch with the company and report fraud.

Remember, knowledge is the best defence against scams. Stay alert, remain vigilant, and always verify the authenticity of any suspicious communication. With the right precautions, it’s possible to feel more confident while navigating the online world. Learn more about scams and phishing.