In today's digital world, scams and fraudulent activities are common. In fact, recent reports indicate that Australians lost approximately $3.1 billion to scams and fraud in 2022 – an 80% increase on total losses recorded in 2021.1
In this article, learn about common types of fraud vs. scams, how to possibly recognise them, and potential ways to help stay protected.
Fraud is typically defined as the act of acquiring information or causing a loss through deception or other dishonest methods.2
A scam generally aims to trick someone into providing money or personal information. Scammers may exploit various channels like online platforms, phone calls, or fake personas to gain a victim’s trust for their own financial or personal gain.3
So, what’s the difference between scam and fraud? The meaning of fraud is typically a broader term that covers any intentional dishonest activity. On the other hand, a scam may refer to a type of fraud that can involve a deceptive scheme with the intention to exploit someone directly.
Here are some examples of common types of scams in Australia:4
It may be hard to tell if something is a scam. Here are a few of the potential differences between scams and fraud:
Fraud typically happens without a victim's knowledge or approval, allowing fraudsters to carry out their deceptive acts without authorisation. In contrast, scams tend to appear authorised because victims may willingly participate or give consent, often due to the scammer's presentation of misleading information or enticing offers.
With fraud, a criminal typically acquires someone’s personal or financial information through unauthorised access. Scams normally rely on victims willingly sharing their information.
This is often due to being misled by false pretences presented by the scammer. The victim may be convinced, through deceptive information or enticing promises, to provide their personal information or participate in a transaction, believing it to be legitimate.
Another difference is that in most cases it may be easier for victims to retrieve their funds with the help of their financial institution as access to their funds happened without their permission or knowledge.
If an individual suspects they may be a victim of a scam, Australia’s National Anti-Scam Centre recommends the following steps:5
Anyone can be affected by a scam. Here are some potential ways to help stay protected:6
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