With scams costing Australians nearly half a billion dollars every year, a study by Suncorp Bank and QUT’s School of Justice and Chair in Digital Economy has found scammers target people experiencing a big life event such as divorce, illness, moving to a new house, or retirement, because they are more vulnerable.
QUT’s Dr Cassandra Cross, an expert in the behavioural indicators behind scams, said scams can affect anyone because these attacks are deeply sophisticated and designed to take advantage of a person’s weakness.
“With a half billion dollar industry in Australia alone, scammers are highly motivated and geared to be three steps ahead to exploit, manipulate and deceive a person into doing things they wouldn’t normally do, and the research tells us that Australians are more at risk when they are facing a moment or period of change,” Dr Cross said.
“If you’re ending a long term relationship or going through divorce you might be more likely to fall for a romance scam, or planning to retire you might be at greater risk of an investment scam, and if you’re moving house may fall victim to a financial scam.
“Christmas, end of financial year or festive holidays are also prime times because scammers recognise these seasonal events are typically sentimental where people spend time with family and friends making you more emotional, time poor and distracted.
“We reviewed one case where a customer was transitioning into retirement and fell victim to various types of scams from fake lotteries, investment and romance scams. The scammers played on the customer’s vulnerabilities and over four years the customer lost hundreds of thousands of dollars, and encountered severe emotional and financial stress.”
Suncorp Behavioural Economist, Phil Slade said these findings highlight that scammers play on a person’s inability to process information in a rational way.
“Change, both positive and negative, reduces a person’s available cognitive energy and ability to digest information in a rational way because we are focusing on our energy on navigating the change. Scammers play on this vulnerability, by positioning themselves as an easy avenue to solve a problem, fill a void or make life easier,” Mr Slade said.
“We’re also more vulnerable during this these moments, as our brains see change as a form of loss and pain. Going through a divorce could mean a loss of financial assets or memories, a new home may be a loss of routine, and retirement may spur feelings of isolation and loss of social connections or meaning.
“Sadly, when we experience the feeling of loss, our normal risk lens completely flips – we’re more likely to take higher risks for less return with the desire to make up for the loss.
“Scammers often try to isolate people – when facing a change, whether it’s good, bad, big or small, we encourage people to not go it alone. Simple things like sharing goals or decision making, creating simple decision rules, as well as connecting with people, friends, family members and support units, can better prevent people falling victim to scams.”
The key things everyone should know about scams:
- Scams are largely under reported - the reported $500M loss from FY18 is just the tip of the iceberg.
- Scams do not discriminate - anyone can become a victim of a scam, irrelevant of your age, financial capability or socio-economic background.
- Prevention and early intervention is best - check your privacy settings across your different accounts/platforms to make sure you are comfortable with the level of information you are sharing.
- Recognise that scams happen - sadly, there are times that the victims don’t believe their bank, family or friends, and they have become so convinced by the scammer that they even refuse to listen to the advice of bank employees.
- Talk about it - many victims don’t tell their story because they are ashamed but sharing your story will help others avoid becoming victims. Talk to your friends and family about the possibility of a scam occurring.
- When in doubt, we are here to help - if you are asked to send money to someone, ensure you have met them in person. If you think you have become involved a scam, call your bank. They can help you protect yourself.
Read more about Suncorp’s partnership with QUT’s School of Justice and Chair in Digital Economy here.