In 2022, Australians grappled with a $3 billion loss to scams, surpassing previous records and equating to the expense of constructing three new hospitals. The Targeting Scams report from the Australian Competition and Consumer Commission (ACCC) has thrust this issue into the spotlight.
Regarding specific scam categories, investment scams were the most prevalent last year, resulting in losses of $1.5 billion. Closely following were remote access scams at $229 million and payment redirection scams at $224 million.
Among the hardest hit were small and micro businesses, experiencing a substantial 95 percent surge in losses that totaled $13.7 million, primarily attributable to payment redirection scams. Taken together, scam losses across the Australian business sector surged by 73 percent, jumping to $23.2 million.
Psychological Factors That Make People Fall Victim to Scams
Experts from the UNSW Business School, Dr. Kam-Fung (Henry) Cheung and Shesha J. Maheshwari, shed light on the psychological factors that render people susceptible to scams.
They noted that financial desperation and a lack of awareness regarding evolving scam techniques are key contributors to the rising number of scam victims.
Financial desperation significantly amplifies vulnerability to scams. According to the experts, faced with financial hardships or the hope for quick monetary gains, individuals become more susceptible to fraudulent schemes, often leading to hasty decisions.
They further noted that scammers are adept at social engineering, exploiting personal connections to manipulate victims. They use information from sources like social media to customize scams, creating an appearance of credibility and trustworthiness.
Many individuals are more susceptible to scams due to a lack of awareness about evolving techniques. Scammers employ sophisticated tactics, including those related to cryptocurrencies and blockchain, which often go unnoticed by potential victims.
Emotional triggers are also a favorite tool of scammers to manipulate their targets. By evoking urgency, fear, or excitement, they hinder rational thinking, leading to impulsive decisions.
A common tactic among scammers is assuming the identity of trusted figures or authoritative figures. They may pose as government officials, representatives of reputable companies, or even law enforcement officers, exploiting trust to deceive their victims.
Experts also said that the fast pace of modern life and constant distractions contribute to a lapse in vigilance. It can lead individuals to disregard warning signs or suspicious behavior. Failing to conduct thorough research and verify the authenticity of communications or offers can expose individuals to potential scams.
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Awareness Is Key to Avoid Scams
Cheung emphasized that awareness is a vital defense against scams, enabling individuals to identify and avoid fraudulent activities. He underscored that it fosters a vigilant mindset crucial in today's rapidly evolving landscape of scams.
To safeguard against potential scams, Cheung and Maheshwari recommended staying informed about common scam tactics, maintaining skepticism towards unsolicited offers, scrutinizing emails for suspicious signs, guarding personal information, and exercising caution with financial decisions.
They further emphasized that falling victim to a scam doesn't reflect personal weakness, as scammers are highly skilled manipulators capable of deceiving anyone. Reporting scams and seeking support are crucial steps towards preventing future occurrences.
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