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Scammers

Written by Michal Park – Senior Adviser

In the past few months, I have had two Hudson clients reveal their experiences with scams.  In both cases, my clients thought they were handing money over to legitimate financial businesses – unfortunately, only one of these clients ended up getting all of her funds back.  One client got back their $25K initial funds transfer after her bank got involved.  The other client lost over $40K.  Neither of these clients were looking to make a fast buck and both had done their due diligence to research the groups involved. $40K is a lot to lose and my client is very ashamed and embarrassed for “falling” for what was ultimately a scam. 

The client who lost $40K did so on the referral of a friend.  This scam has all the hallmarks of a classic Ponzi scheme – where new investors are brought in to pay the returns of the initial investors.

The client who managed to recoup her $25K researched the company to within an inch of its life – or so she thought.  She even googled their ABN to ensure it was a valid company.

I have also had experience with this – knowing all that I know about the finance industry, so it proves that it actually can happen to anyone.  My experience involved paying a bill online and not double checking at the confirmation page (before the actual transaction goes through) – a payment redirection scam.  Little did I know that my account was hacked at this point, and $10K siphoned from my account.  When I was alerted to this transaction by my bank, my accounts were all frozen and the funds repaid to me from the bank.  I got lucky.

Whilst the over 65 year age group has reported the most amount of money lost to scams, the number of reports is consistent across most age brackets.  So I think there is a misconception out there that people who fall for scams are only elderly, or weak or gullible.  This is just not the case.  The number of scams reported out there just in relation to Covid-19 rivals the number of cryptocurrencies*. 

It angers me to know people like this are here to take advantage of others.  It does nothing to strengthen my faith in society and simply makes us all that little more untrusting – which is a sad reality of living in the 21st century (though scams have existed for eons – they are just more prevalent and sophisticated these days).

I would encourage all individuals to not blindly trust a referral from a friend or a company because it has a good website, or a coldcall from a “reputable” business.  Ask a trusted independent adviser (be it your accountant, solicitor or financial planner).  The following tweet was from Scamwatch Australia in April this year:

“Investment scams result in the highest scam losses in Australia. Scammers are impersonating real companies and creating legitimate-looking documents by plagiarising real websites. Make sure you’re dealing with the real thing and get independent advice before investing”.

*more than 4,000 different cryptocurrencies are in existence as of January 2021. Scamwatch has received over 6,120 scam reports mentioning the coronavirus since the outbreak ($8.4mill in reported losses).

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