Yahoo Finance How to spot an EOFY scam
With the end of financial year (EOFY) fast approaching, tax scams are something that consumers should be extra vigilant about as scammers ramp up their activity.
Scammers will pose at the Australian Taxation Office (ATO) claiming that a tax debt needs to be paid immediately at the risk of facing grave consequences.
These scams also use personal information found online to try and convince consumers that they’re legitimate.
On top of that, many scammers will take advantage of increased marketing by companies to trick consumers into thinking they’re legitimate.
Matt Baxby, CEO of Revolut Australia told Yahoo Finance his tips for how to spot a scam and how to avoid getting caught out.
Most common scams at EOFY
Unfortunately scammers resort to a number of creative ways to con people out of their own money.
Data from the ACCC’s Scamwatch shows the most popular scams are shopping or false investment scams, dating and romance scams - commonly known as catfishing - and phishing scams which trick consumers into sharing their personal banking information.
Baxby said due to the COVID-19 pandemic, health and medical related scams also increased more than 20-fold in the last year.
How scammers make contact
Baxby said scammers pretending to be Government institutions like the ATO will often reach out over the phone.
“Scammers typically favoured targeting people over the phone, where they could pose as authorities from the government or financial institutions and pressure people into providing their personal details. They also tended to favour emails and text messages,” he said.
It’s important to remember that just because an email or website you’re redirected to has a legitimate logo does not mean it is legitimate.
The warning signs of a scam
Unfortunately scammers are getting more sophisticated, and can often make the scam seem more authentic using personal data they’ve taken from the web, Baxby said.
There are some common red flags to help consumers identify if they are the target of a scam.
“The first thing to look out for is if the communication is unexpected and without forewarning. It’s also more likely to be a scam if they are threatening in their communication, and are asking you to transfer money in a very short timeframe,” Baxby said.
“Scammers will also ask for personal information that legitimate institutions will never ask for, such as your bank details and passwords. These warning signs can be applied to calls, texts and emails.”
Why scammers come out of the woodwork at EOFY
Baxby said there are two main reasons that scammers ramp up their activity during this time, and that’s the shopping season and tax season.
“Because the EOFY is a big time for shopping sales, scammers take advantage of the increased marketing activity by legitimate businesses,” he said.
“They use the opportunity to pose as businesses with great sales, when in fact they’re probably offering goods that will never arrive, or are sending consumers links to malware designed to steal personal information.”
Additionally, with Aussies preparing to lodge their tax return, scammers will pose at the ATO in the hopes of tricking people into giving them money.
“The EOFY means that tax is on people’s minds, which makes unsolicited calls from scammers posing as tax authorities seem more believable in the months between June and October,” he said.
How to avoid being scammed
Baxby said the most important thing to remember is to never share your sensitive information.
“Never tell anyone your security details, including your bank account details, passwords or even SMS authentication codes,” he said.
“Legitimate financial institutions will never ask for these details. Be wary of deals that seem too good to be true, and don’t click on links you don’t 100 per cent trust.”
And for tax scams, Baxby said it’s important to remember that the ATO will never request you to pay a fine or transfer money in order to protect yourself from pending legal action.
“Another handy tip is that legitimate phone calls from the ATO do not project a number on caller ID, and are never pre-recorded,” Baxby said.
“Many organisations will now contact you through multiple avenues, so it’s worth double checking unsolicited calls with other sources of information. And if you use apps to manage your money, it’s worth checking for communications from within your app.”
If you think you have been the victim of a scam you can contact Scamwatch to report the incident and get more information.
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