CPD: Scam alert – the role for advisers in our biggest consumer protection challenge


Financial scams are the biggest consumer protection challenge facing the financial services sector.


Financial scams are arguably the biggest consumer protection challenge facing the financial sector in 2024. With data suggesting scams are costing Australian consumers more than $3 billion each year[1] – a figure that is growing all the time – regulators and product providers are facing an unprecedented challenge in protecting consumers from significant financial harm from the perpetrators of increasingly sophisticated scams.

As trusted experts relied upon to protect and grow their client’s wealth, financial advisers are on the frontline in the battle against financial fraud and are ideally placed to help their clients identify and avoid potential scams, and to help them respond and rebuild in the event that they fall victim.

This article examines the scale and nature of financial scams, and proves that even educated, vigilant individuals can be duped. The mechanisms in place to help protect consumers against scams will also be explored, as will the specific role of financial advisers in tackling this growing issue.

The scale of the problem

According the 2023 Targeting Scams Report[2] – published by the ACCC – Australians lost a record amount of more than $3.1bn to scams in 2022, up significantly on the previous year.

The report compiles data from several sources, including the Federal Government’s Scamwatch service and major banks and money remitters.

Many experts believe the true figure is much bigger, with an estimated 30% of incidents going unreported due to victims a lack of willingness/ability to share their experiences[3].

According to the Report, investment scams caused the most financial loss, with accounting for around $1.5b, followed by remote access scams ($229m) and payment redirection scams ($224m).

Covid brought a spike in financial scams in Australia[4], with a combination of financial hardship and unique opportunities (the superannuation early release program) contributing to a then record amount of financial fraud. And that growth trajectory continued, with the losses reported to Scamwatch increasing 224% between 2020 and 2022, and 76% between 2021 and 2022, to a total of $569 million.

While the losses reported to Scamwatch in 2023 were lower[5] – at around $476 million – the number of incidents reported jumped by around 26% to almost 302,000.

ASIC and AFCA data reinforces the scale of the issue

In early 2024, AFCA released its 2023 annual data, which showed it had received over 100,000 complaints in a single year, the highest ever. Among the complaint categories experiencing the largest increases, the standout was scams, with the 8987 complaints related to scams representing an increase of 95 per cent over the 4611 recorded in 2022[6].

ASIC data released in March 2024 provided additional perspective[7], revealing nearly 3,500 investment scam websites have been knocked out by ASIC’s scam website takedown capability since it was launched in July 2023.

The nature of the problem

While scams come in many shapes and sizes, for reporting purposes, there are several common categories they can fall into, including:

  • Investment scams, where victims are tricked into investing into vehicles which either don’t exist, or don’t perform in the way promoted, resulting in losses.
  • Remote access scams where criminals gain access to a person’s computer to steal data, demanding a ransom to give it back.
  • Payment re-direction scams where criminals change the payment details on legitimate invoices, seeing victims pay money to the wrong people.
  • Romance scams, where victims are persuaded to send money to romantic partners with whom they have a ‘digital only’ relationships.
  • Phishing, where people are tricked into providing personal data, which is then used to access their bank accounts and superannuation.

ACCC data shows investment scams to be the largest single category of loss, by a considerable margin, followed by remote access, then payment redirection scams.

The same report revealed the top contact methods used by scammers to be:

  • SMS (33% of reported scams)
  • phone (29%)
  • email (22%)
  • 6% internet
  • 6% social media platforms.

Why we fall victim to scams

Research[9] conducted by Dr Kam-Fung Cheung and Shesha Maheshwari of the UNSW Business School identified six key reasons people fall victim to scams.

1. Financial desperation: Significant financial strain or a craving for quick monetary gains renders individuals more susceptible to scams promising easy wealth or lucrative investment returns. Under such circumstances, the urgency to alleviate financial woes can cloud judgment, making individuals more vulnerable to fraudulent schemes.

2. Social engineering: Scammers adeptly exploit personal relationships and connections to manipulate their victims. Leveraging information obtained from social media and other sources, they tailor their scams to appear more genuine and trustworthy. Victims, swayed by this false sense of familiarity, are more likely to fall victim to such deception.

3. Lack of awareness: Many individuals remain unaware of the diverse array of scams and the sophisticated tactics employed by scammers. Ignorance regarding evolving scam techniques, including those involving cryptocurrencies and blockchain, increases vulnerability. Uninformed individuals inadvertently heighten their risk of succumbing to scams.

4. Emotional manipulation: Scammers frequently exploit emotions such as urgency, fear of missing out, or excitement to sway their targets. They also tap into cognitive biases, such as our default assumption that people are truthful, or our need to be seen as consistent in decision making (so we can’t say no if we have previously said yes). Criminals also rely on the sunk cost bias, with some scams starting with a request for a small amount, and then requesting a larger amount to ‘complete the transaction’. A victim’s fear of losing the money, time, or effort they had already invested will often see them comply.

5. Trust and authority: Impersonating trusted individuals or authoritative figures is a prevalent tactic among scammers. By posing as government officials, company representatives, or law enforcement officers, scammers exploit trust to solicit personal information, access financial accounts, or facilitate financial transactions. The ATO example is a very real and current example of this. Victims receive a phone call – purporting to be from the ATO – telling them they have a tax debt, and that it must be paid quickly to avoid criminal charges. The payment methods offered are often unusual (such as pre-paid gift cards or cryptocurrency).

6. Lack of vigilance: Busy lifestyles and constant distractions contribute to a lack of attentiveness, causing individuals to overlook warning signs or suspicious behaviours. Failing to conduct adequate research, verify the authenticity of communications or offers, and safeguard personal information leaves individuals vulnerable to exploitation.

Even the financially literate and vigilant can fall victim

While the victims of financial scams are often ‘victim blamed’ (a phenomenon which contributes to underreporting) and assumed to be naïve and uninformed, the increasing sophistication of scams means even financially literate and vigilant individuals can be scammed.

In early 2024, news broke[10] that AFCA’s Chief Operating Officer, Justin Untersteiner, had fallen victim to a banking scam to the tune of $4,000.

In this scam, criminals are able to mimic the phone number of a victim’s bank, sending them an SMS telling them their account has been compromised and to call an emergency number. The victim has often received other (legitimate) messages from that number, and so the scam SMS appears real. Upon calling the emergency number (fake), they are then asked to provide their personal details, and to generate a one-time passcode on their phone, which they are asked to give to the person on the phone (who then uses it to access the victim’s account themselves).

The bond scam

Another example of a sophisticated scam is the fixed income bond scam which made news in Australia[11] in 2021.

In this fraud, investors were duped by fake high-yield bond prospectuses, badged as from some of the world’s largest financial brands.  Rather than reaching out to victims, the fraudsters instead relied on luring victims to them via Google searches and fake investment comparison websites.

FAAA phishing attempt

Criminals can also be clever with the use of email addresses and website URLs, making changes so small as to be imperceptible, and thus seeming legitimate. An example of this was the attempted phishing attack on FAAA members[12]. In early 2024, members were sent an email purporting to be from ‘S.Abood@ member-fpa.org’, a non-existent address.

What is being done to fight scams in Australia?

Tackling scammers must be done at all stages of the chain, and consumers, governments, regulators, and financial institutions all have a crucial role to play. Advisers should make themselves aware of the various initiatives and bodies operating in this space, which includes, but is not limited to:

1. Established by the ACCC in 2002, Scamwatch acts as a central repository where consumers can report scams. These details are then published on their website as a way of alerting other consumers.

2. The National Anti-Scams Centre: Building on the work of Scamwatch, the federal government launched the National Anti-Scam Centre in July 2023[13]. The role of the Centre is to coordinate government, law enforcement and the private sector to combat scams. The goals of the Centre include providing better information about scams more quickly, and make it easier to report scams by building new reporting tools and strengthening connections between reporting systems.

In July 2023, the Centre announced its first fusion cell, designed to specifically identify ways to disrupt investment scams. Jointly led by ASIC and the ACCC, the fusion cell will include representatives from the banks, telecommunications industry, and digital platforms.

3. Scam-Safe Accord: November 2023 saw the launch of the Scam-Safe Accord[14], between Australia’s community owned banks, building societies, credit unions and commercial banks. The Accord will see the development of a comprehensive set of anti-scam measures across the entire industry, including a $100 million investment by the industry in a new ‘confirmation of payee’ system to be rolled out across all Australian banks. This system will reduce scams by ensuring people can confirm they are transferring money to the person they intend to.

4. AFCX and FRX: The Australian Financial Crimes Exchange (AFCX) is an independent body funded by Australia’s major banks, designed to be the primary channel in the fight against financial and cybercrime. In May 2023, AFCX announced the launch of the Fraud Reporting Exchange[15], designed to disrupt fraudsters and scammers by allowing the reporting of scam payments in close to real time, boosting the likelihood that funds can be frozen and returned to customers.

5. SMS Sender Registry: December 2023 saw the Australian Communications and Media Authority (ACMA) roll out a pilot of the SMS Sender ID Registry scheme[16]. Under the scheme, text messages from official sources such as MyGov will be protected from being impersonated by scammers. When fully rolled out this will help prevent the ‘intrusion’ of scammers into text chains from legitimate sources, such as MyGov, Medicare, the ATO, and financial institutions.

6. IDCARE: IDCARE is a national support centre for victims of identity crime, offering offers a free service to assist victims with repairing the damage to their reputation, credit history and identity information.

Role of the adviser

Unlike the UK, where legislation to come into effect in 2024 will require banks to reimburse fraud victims who have been tricked into sending money to scammers[17], Australia has not yet formalised such protections, leaving the consumer to shoulder more of the risk. As such, the role of the financial adviser as educators, advocate and sentinel for their clients becomes even more critical.

There are several important ways advisers can help protect their clients:

  • educating them about how to spot and avoid scams
  • giving them the confidence to report scams
  • providing an infrastructure in which client data is secure
  • monitoring client behaviour for any red flags
  • assisting with reporting and seeking remediation when scammed.


Advisers should themselves be alert to techniques used by scammers and provide the means for their clients to spot these techniques. This education could be simply verbal or through the content created for clients such as newsletters, blogs, videos, and checklists.

For those advisers thinking about providing their clients with a checklist, the following guidance from AFCA may be useful:

  • If you are contacted by someone purporting to be from your bank, telecommunications company, or a government agency, before giving access to any of your personal details, contact the relevant body to check it was them who contacted you.
  • If someone is putting pressure on you to send funds or a deal seems too good to be true, you should pause; take time to review the suggestion and maybe discuss it with a trusted family member, friend, or adviser.
  • Never send money or give credit card details to someone you don’t know, or a business you do not trust.
  • Always check a business is legitimate before sending funds or personal details to it – such as by searching its name on the ACCC’s Scamwatch website or ASIC’s MoneySmart website.
  • Never send online account details or copies of personal documents to anyone you don’t know or trust.
  • Lock your mailbox and use passwords for email.
  • Shred sensitive documents and store any digital versions using security software.
  • Do not forward or open strange or unreliable emails or website links.
  • Check your credit report at least once a year. You can use a reputable credit reference bureau to help you monitor and catch unauthorised activity.
  • Always report a scam to help others from falling victim.
  • If you have been making regular payments to an account and you get an email telling you the account details have changed, always call the recipient of the payment to check they made the change.

Make your clients feel confident to come forward

Scam victims often feel shame and embarrassment at being duped and can be reluctant to come forward – a major contributor to the significant under-reporting of scams. Victim blaming is also rife, compounding the issue.

As your clients confidante, financial coach, and mentor, you should put them at ease and educate them about the sophistication of scams, which sees even highly educated, vigilant people fall victim. Reporting scams not only helps them, and opens up the potential for remediation, it can help others falling victim.

Provide a secure infrastructure for client data and communications

Financial firms – including advice practices – make juicy targets for scammers, with smaller firms often the most vulnerable. Protecting client data is a legal and ethical obligation for advisers.

But beyond the obvious mechanisms and protocols most firms have in place around the storage of client data and access to the firm’s network, the advisers who are leading in this space are also turning their attention to the channels through which they communicate with clients.

Award-winning Australian adviser Peita Diamantidis has called for a shift away from traditional communication channels, such as email and SMS, cautioning that they are too easily breached by scammers[18]. Diamantidis is one of the growing number of advocates for client portals, which are increasingly being seen as a hygiene factor for truly customer focused advisers.

Monitor client behaviour for red-flags

Ensure you have oversight of your client’s major financial transactions, and be alert to any unexplained requests for large and/or unplanned withdrawals. If something is suspicious, check with the client and remind them of the checklist above.

Help your clients report and recover from scams

Unfortunately, there is a high chance that at least some of your clients may fall victim to scams. In the event that happens, your role is to help them respond as quickly as possible.

Again, guidance from AFCA, in the form of the following steps, is useful here:

  • If you’ve sent money or shared your banking or credit card details with someone you don’t know, the first priority is to contact your financial firm or bank immediately.
  • If the scam occurred on social media, report it to the social media platform.
  • If you’ve given your personal information to a scammer, visit IDCARE.
  • Ask for a credit report from a reputable credit reference bureau.
  • Take the time to warn your friends and family about scams and do not share or forward unreliable emails or website links.
  • Report a scam to Scamwatch.


The escalating threat of financial scams poses a formidable consumer protection challenge within Australia’s financial sector. The multifaceted nature of scams, and their increasing sophistication, underscores the critical need for comprehensive strategies to safeguard individuals and businesses against fraudulent activities.

Collaborative initiatives such as the National Anti-Scams Centre and the Scam-Safe Accord are examples of a concerted effort to enhance consumer protection measures and strengthen the resilience of Australia’s financial ecosystem against scams.

Ongoing vigilance and adaptation is needed to combat this pervasive threat, with education and awareness being critical.

Financial advisers, as frontline defenders against financial fraud, play a pivotal role in educating clients, identifying potential scams, and assisting victims in navigating the aftermath of fraudulent incidents.


Take the FAAA accredited quiz to earn 0.5 CPD hour:

CPD Quiz

The following CPD quiz is accredited by the FAAA at 0.5 hour.

Legislated CPD Area: Regulatory Compliance & Consumer Protection (0.5 hrs)

ASIC Knowledge Requirements: Generic Knowledge (0.5 hrs)



[1] https://www.theguardian.com/australia-news/2023/apr/17/australians-report-record-31bn-losses-to-scams-with-real-amount-even-higher-accc-says
[2] https://www.accc.gov.au/system/files/Targeting%20scams%202022.pdf
[3] Ibid.
[4] https://www.accc.gov.au/media-release/scammers-capitalise-on-pandemic-as-australians-lose-record-851-million-to-scams
[5] https://www.scamwatch.gov.au/research-and-resources/scam-statistics?scamid=all&date=2023
[6] https://www.professionalplanner.com.au/2024/01/afca-records-over-100k-annual-complaints-for-the-first-time/
[7] https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-037mr-asic-shuts-down-nearly-3-500-scam-websites-steps-up-surveillances-in-push-to-protect-consumers/
[8] https://www.accc.gov.au/system/files/Targeting%20scams%202022.pdf
[9] https://www.unsw.edu.au/newsroom/news/2023/09/cracking-the-code–why-people-fall-for-scams
[10] https://au.finance.yahoo.com/news/financial-watchdog-boss-scammed-out-of-4000-235544537.html
[11] https://www.afr.com/companies/financial-services/police-probe-bond-scam-as-hsbc-vanguard-pimco-are-hijacked-20210420-p57kq6
[12] https://www.professionalplanner.com.au/2024/01/faaa-members-hit-with-phishing-email/
[13] https://www.accc.gov.au/national-anti-scam-centre
[14] https://www.ausbanking.org.au/new-scam-safe-accord/
[15] https://www.ausbanking.org.au/australian-banks-join-new-fraud-reporting-exchange-digital-platform-to-help-halt-payments-to-scammers/
[16] https://www.smh.com.au/national/are-we-getting-better-at-spotting-scams-maybe-but-not-for-long-20240131-p5f1ac.html
[17] https://www.theguardian.com/money/2023/jun/07/uk-banks-to-reimburse-victims-under-new-rules-regulator-confirms
[18] https://www.ifa.com.au/news/32955-it-s-time-for-advice-practices-to-revamp-their-comms-adviser-says?highlight=WyJzY2FtcyJd

You must be logged in to post or view comments.