Cybercrimes and digital scams continue to be on the rise in Australia, amid rapid technological growth.
In a two-part series, Australian Broker spoke with lenders and government agencies about their response to the rising issue Down Under, and how many were moving to educate consumers. In the second installment, we spoke with experts in the financial industry to find out tangible ways brokers and borrowers alike can protect themselves from theft.
The first step in preventing scams is understanding what they look like. Fraudulent activity comes in many different forms, including email scams, phishing attempts, suspicious links, identity theft, fake financial advice, foreign investments and even scammers making cold calls to potential victims, hoping to gather sensitive information.
Ben Shapira, a lecturer at Melbourne-based Swinburne University of Technology, told Australian Broker that over time both the frequency and levels of sophistication of scams will increase. "And it'll mean that platforms, banks, [and] healthcare companies will have to become more sophisticated in the way that they address how they protect themselves against those types of scams," he said.
"It's only really by checking your credit report on a regular basis that you can see things that have happened, if someone steals your identity," said Shapira, who is also the founder and managing director of Dosh, a digitally-encrypted platform that puts all of a borrowers' financial data on one platform, which can then be shared with their broker. "You might be applying for a loan, or car financing, or a credit card, for example, and then you find that there are loans against your name that you were unaware of. Oftentimes, you don't know about it until it's too late.
"But consumers realistically, when they apply for a loan, that's when their credit check is done," Shapira said. "That's when they find out if there's particular problems on their credit reports. And it could be something as simple as a single loan against someone, or as far-reaching as someone has drained all their bank accounts, maxed out any potential credit they might have and then disappeared with their money. It could be anywhere along that spectrum."
That's why he said borrowers should continually check their credit reports.
"In Australia, consumers are allowed to get a full credit report every 90 days for free," Shapira said. "One of the reasons why the government has required that is to allow consumers to be able to monitor their credit."
Digital platforms like ClearScore offer free services to consumers to monitor their credit reports and credit scores over an extended period of time. In addition, software products, such as Experian or Equifax, allow consumers to lock their credit to prevent anyone from making inquiries on their behalf.
"Because each inquiry on your credit report actually lowers your credit score, which lowers your ability to borrow," Shapira said.
"That's more on the consumer to be vigilant than it is necessarily on the broker," he said. "The broker just does what they can with the information that's provided. But the brokers themselves, in large part, need to be better educated on what these scams are and how it could affect them."
Lenders and aggregators, meanwhile, are steadily becoming more and more wary of the proliferation of scams. Many are offering extended education for both borrowers and brokers to be better equipped and more readily able to detect when something is not quite right.
National Australia Bank (NAB) head of security culture and advisory Laura Hartley said when it comes to online scams, there are usually a few dead giveaways. That includes "spoofed URLS," or websites that at first glance appear legit, but are actually slightly altered. These can be found in WhatsApp messages, phishing emails and across social media platforms.
Other tactics include messages marked by urgency, such as through limited-time promotions, or threats to suspend an account if no action is taken. These often come by way of an email or a random cold call. Rather than clicking on a link or giving away sensitive information, borrowers should check in with their brokers, who can then call the financial institution directly and ask for clarification. Brokers can also preempt this by regularly checking in with clients.
Other big reveals include things like sloppy websites, which may include spelling mistakes, deals that appear too good to be true or a lack of customer service contact information.
"Realistic looking but phony websites are often used in phishing and investment scams to tempt people into sharing their banking and personal information, or promising high windfalls from financial products or services," Hartley said.
