In Everyday money on Tuesday 16th Jul, 2019

How to know when a scammer’s playing mind games with you

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Scammers make sure they have a grip on your heart and mind – before they make a move on your wallet.

You’ve no doubt read about somebody who’s lost money to a romance scam or fallen victim to a hoax demand for payment.

If you’re like most people, you will have thought “that could never happen to me”, or even “how could they have not seen through the scammer?”.

But as Shakespeare said, love can make people do strange things. Now, the internet wasn’t around in Shakespeare’s day, but human nature hasn’t changed much in the last 400 years.

Taking advantage of people by playing mind games isn’t new either, it’s just that the internet has created a new playground for people who like to scam other people to operate in. Some of them are very good at what they do – and anyone is a potential target. Scammers do not discriminate.

Love really is blind

There’s some scientific evidence that backs up Shakespeare’s claims. Researchers from University College London say feelings of love can shut down the part of the brain we rely on to make good decisions.

In other words, when we’re in love with somebody, our ability to critically assess that person’s character and personality is reduced.

Unfortunately, the consequences of being blinded by love can be disastrous. If you aren’t careful, falling in love with a scammer can leave you with a broken heart – and a reduced bank balance.

Your money for your love

According to the Australian Competition and Consumer Commission (ACCC), Australia’s consumer watchdog, nearly 4,000 dating scams were reported last year (and it’s suspected many more went unreported, as people often feel ashamed and embarrassed that they didn’t detect the red flags and warning signs). The main target? People aged between 45 and 64.

Nearly $25 million was successfully obtained by scammers from innocent people, up 20 percent from the year before.

One victim was 65-year-old Jan, who lost her life savings of $260,000 to a man she met online. Jan shared her story with Starts at 60 earlier this year in the hope of helping others stay safe from scammers.

She says that in hindsight, the speed at which the relationship developed should have raised red flags with her. After all, she received a marriage proposal within just three months of chatting with the man online!

“They start to profess more and more interest and love at an early stage, when they really can’t know you well,” Jan says of her experience with the man, admitting that she was “completely swept off her feet”.

She particularly notes that scammers will quickly try to move you off the site where you met, by suggesting that you use email or a chat app instead.

“Unfortunately, it’s intoxicating when someone says, ‘I only want to talk to you, I think you’re special, I think we’re destined to be together, I’ve been waiting all my life to find you’.”

Michelle White, an executive manager in fraud investigations at Westpac, says the experience described by Jan Marshall is common, and the end goal is always the same – extracting money from the victim.

“Romance scams are designed to build trust quickly, and often originate from dating websites, but quickly move to social media websites or chat apps,” White explains. “Communication becomes frequent, and declarations of love are often received within the first few emails or calls.”

There’s even a term for this; it’s called ‘love bombing’ and is designed to influence and hook a person in, so they can be easily manipulated at a later date.

White says the excuses then typically start to flow, including reasons why the scammer can’t meet in person; being a member of the armed forces or working overseas are common explanations.

White says once a personal bond is well-established, scammers quickly move on to money talk. Often, they request the victim’s bank details so they can make a deposit, which they then instruct their victim to transfer. “This is generally prior to asking for money from you directly,” White notes. “It helps build a sense of trust simply because you believe they shared their money with you first.”

The goal, of course, is to lull you into a false sense of security, so you will then lend them money, again for what may seem like a series of plausible reasons. Unfortunately, once you’ve transferred money to a scammer’s overseas bank account, it can be difficult, if not impossible, for your Australian bank to retrieve your savings for you.

Another ploy that scammers sometimes try out is to ask you for your online banking details. They may claim that they need your sign-in information to make a deposit, even though this is manifestly untrue. If someone asks for your internet banking credentials, this is a huge warning sign that they are not genuine.

There are other signs, though, that can help alert you to a love scam before you transfer your cash. A common one is a mismatch between details the person gives to you in conversation and the details that appear on their public social media profiles. Another is habitually poorly written communications – if someone claims to be a well-educated professional yet is unable to spell or use simple grammar or seems to have a poor grasp of what they claim is their native language, that’s a red flag!

One way to check the bona fides of a digital paramour is to do a reverse-image search on Google. This allows you to check whether the photo of the person you’re speaking to is an image they’ve stolen, because it will show you where on the internet the image also appears. If you find the same picture is used on multiple social media accounts under different names, be wary!

If you fear you have been the subject of a love scam and have provided your banking details to a scammer, it’s vital that you contact your bank immediately to can secure your accounts. You should also report the incident to the Australian Cybercrime Online Reporting Network (ACORN), a government body that brings together law enforcement agencies from all Australian states and territories. Reporting your incident is important as it may assist in alerting others to the scam.

Don’t fear the taxman

Love is a powerful emotion, which is one of the reasons scammers target the bank accounts of people looking for love. But fear is a powerful motivator as well.

When people feel threatened, they don’t always think and act logically. Scammers know this, which is why many common scams demand you pay up “right now”. They reduce your opportunity to take time to think clearly before acting or to gain a second opinion because their intent is for you to act while you’re feeling unsettled or worried.

Commonly, scammers issue such threats in the form of an email or phone call claiming that you owe money to the Australian Taxation Authority (ATO), the Australian Customs Service, a law enforcement agency, a bank or utility provider (Telstra is a particular favourite), and threaten that you’ll be arrested or legal action will commence if you don’t hand it over immediately.

They can be very convincing, but their intention is always the same – to frighten you and create a sense of urgency that doesn’t allow you time to think through what they’re proposing.

As the ACCC says, it’s easy for scammers to use offshore call centres that imitate local, legitimate telephone numbers. They may even go to the trouble of creating counterfeit documents that look ‘official’ and are filled with legal jargon to pile on the panic you feel.

But the ATO and many Australian companies have repeatedly said that they will never demand immediate payment, and particularly not by telephone. These companies will never ask that you pay using unusual methods such as PayPal or iTunes gift cards, ask you to transfer money to an overseas financial institution or require that you share your online or other banking passwords or PINs.

Greed isn’t always good

There’s one other human emotion that scammers particularly like to prey upon: greed.

Typically, this involves contacting you by phone, email, text message, social media or messaging apps to inform you that you’ve either won a prize (for a competition you never entered) or are lucky enough to be chosen to partake in a lucrative investment opportunity.

The ACCC Scam Report 2018 stated that investment scams are one of the growing trends hitting Australia, with $86 million in losses sustained. The call centres that operate these investment scams in particular are known as ‘boiler rooms’ because they use high-pressure sales tactics to convince people to sign up for dubious or even entirely fraudulent stocks or other financial investments. In 2018, bitcoin investments were the hot seller for boiler rooms, which will usually conduct their scams by phone and involve you transferring money to purchase the ‘asset’ being spruiked.

Investment scams can present very professional-looking websites and login account information. Once you transfer funds you will see a falsely inflated increase, but when you try to withdraw your money you’ll find the investment company has disappeared along with your funds. Prior to investing your funds, always conduct your own independent research. Ensure the investment company is registered with the Australian Securities and Investments Commission (ASIC). Speak to trusted friends, family or your accountant for a second opinion. Don’t rush into investments where you are informed that if you don’t sign up immediately you will miss out!

Dodgy prize giveaways, on the other hand, usually arrive on your device by text or messaging service and ask you to click on a link to enter your personal details in order to claim your prize. They may say that you’ve won a sum of money, a holiday or flight tickets, but are really an attempt to gain your personal information.

A similar scam involves asking you to participate in a survey in order to receive a prize, such as a gift card – again, it’s the personal information you provide that the scammer wants.

In these cases, the scammers are trying to capitalise on our very human desire for an easy win or unexpected riches. Before transferring money or providing your personal details to any person you don’t know, ask a family member or close friend what they think and do some research. What may seem credible to you in the heat of the moment may ring alarm bells with a cooler head.

As the ACCC points out, if an offer seems too good to refuse, it’s probably a good idea to refuse it. “Scammers know how to press your buttons to get what they want,” the watchdog says.

Westpac’s Michelle White agrees, saying scammers will often try and isolate you from family and friends or convince you not to tell anyone about them, precisely because they fear being uncovered.

“Remember, it’s okay to get a second opinion from a friend that the story is legitimate,” she says.

If you’re still unsure whether you’re being scammed, Westpac has a wealth of information online about the common types of scams you should look out for, which you can find here. You can also look at the ACCC’s Scamwatch site, which is regularly updated with current scams.

Are you confident you’d recognise if a scammer was playing on your emotions? Have you stepped in to protect a friend or family member at risk of being scammed?

Things to know: The information in this publication is general information and factual only. It does not constitute any recommendation or financial product advice. It is an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such. You should consider obtaining your own independent professional advice. © Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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Westpac is helping to protect you from scams. Join us for an awareness and education seminar. Coming to a local branch near you. Email us to find out more [email protected] or visit our website for more information.

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