Australians busily getting their tax affairs for the end of the financial year have been issued a warning – scammers are about, and tax time is the best time to extract cash from the gullible.
Last year, scams cost Australians $851 million, according to the Australian Competition and Consumer Commission (ACCC).
And very little of that money is ever recovered.
“Unfortunately, scammers continue to become more sophisticated and last year used the Covid-19 pandemic to scam and take advantage of people from all walks of life during this crisis,” said ACCC deputy chair Delia Rickard.
But scam watchers have said there are easy ways to avoid falling foul of a financial faux pas.
Why people are fooled
“Tax time is the perfect opportunity for scammers, as taxpayers are often time-poor, working to a deadline and are conscious of the legal consequences of failing to comply,” Associate Professor Paul Haskell-Dowland and Dr. Nathalie Collins of Perth’s Edith Cowan University wrote in a piece for the website The Conversation.
“They’ll be everywhere this EOFY.
“Receiving an email, SMS, or voice call at this time of year with a tax-related matter has an air of legitimacy (we expect them) and a sense of urgency (we don’t want to be fined),” they said. “But illegitimate demands for payment and requests for information can lead to huge financial losses and identity fraud.”
The pair said that the actual cost of tax scams was probably far more extensive than recorded due to many people not reporting they’ve been fleeced because of the shame of having the wool pulled over their eyes.
Scammers have lots of tricks up their sleeves to do just that – mainly for us to either hand over personal information, cold hard cash, or sign up to a shonky scheme.
“The excitement of chasing (and getting) a good deal leads to a feeling of self-satisfaction that’s hard to resist. Bargain-hunting, in other words, makes us feel smart. But it doesn’t mean we are smart,” said Prof Haskell-Dowland and Dr. Collins.
“Criminals rely on this to bypass a potential victim’s rational brain and appeal directly to their emotions. Scams will often frighten victims with threats of financial or even criminal penalties.”