As the festive season approaches, it’s important to stay vigilant against potential scammers who may try to ruin the fun. Unfortunately, scammers become more active during the holidays and often take advantage of people when their guard is down.
In 2022, Australians lost more than half a billion dollars to scams, with investment and cryptocurrency scams accounting for around $300 million.
Researchers from Deakin University’s Centre for Cyber Security Research and Innovation had the chance to speak to victims of these scams. These scams have become highly sophisticated, and criminals no longer discriminate as to whom they target.
Recent victim demographics show that victims come from a wide range of backgrounds, with an almost even split across different age groups and genders.
So, how can you spot these scams? The golden rule should always be: if something sounds too good to be true, it probably is.
Most crypto scams involve getting someone to buy and send cryptocurrency to the perpetrator’s account as part of an investment opportunity that looks legitimate.
Cryptocurrency is the currency of choice for scammers as it’s unregulated, untraceable, and transactions cannot be reversed.
Scammers use a range of different methods for targeting victims:
- Investment scams: scammers pretend to be investment managers offering high returns on crypto investments, only for the victim to find the money has been transferred away.
- “Pump and dump”: scammers hype up a new cryptocurrency or NFT project and artificially increase its value. Once enough victims invest, the scammers sell their stake, leaving the victims with worthless cryptocurrency or NFT.
- Romance scams: scammers use dating platforms, social media, or direct messaging to gain someone’s trust and offer an investment opportunity that promises high returns or requests cryptocurrency to cover medical or travel costs.
- Phishing scams: scammers send malicious emails or messages with links to fake websites offering huge returns on investment or just outright stealing credentials to access a victim’s digital currency wallet.
- Ponzi schemes: scammers use cryptocurrency taken from multiple victims to pay high returns to some of them. When more victims invest, the scammers escape with all the funds.
- Mining scams: scammers convince victims to buy cryptocurrency to use in mining more of it, but no mining is actually taking place – the scammers just transfer the funds back and forth until the victim has invested more than they originally intended.
Although methods may change, there are sure telltale signs of a potential scam to look out for:
- Very high returns with promises of little or no risk.
- Proprietary or secretive strategies to gain an advantage.
- Lack of liquidity, requiring a minimum amount to be accumulated before any funds are released.
Finally, to keep yourself safe, here is some advice:
- Don’t share personal details online or over the phone.
- Don’t invest in something you don’t understand.
- If in doubt, talk to an expert or do your own research (don’t accept any links sent by scammers).
It’s essential to be aware of the potential scams out there during the festive season and know how to spot them. By following the advice above, you’ll be able to stay safe and enjoy the holidays without worrying about falling victim to a scam.
