Scams on the Rise: What You Need to Know to Protect Yourself

Scams Awareness Week 2026 takes place from 24 to 28 August.  

Our firm has seen an increasing number of enquiries from clients who have suffered financial loss due to online scams.  This corresponds with the developments in artificial intelligence, which means that online scams are becoming more sophisticated and difficult to recognise.

The types of scams fall into a number of broad categories.

Inheritance Scams

In inheritance scams, scammers will contact their victims notifying them that they have received a large inheritance from someone the victim does not know (ordinarily a distant family member).  Scammers will ask that their victims pay a fee so that they can claim their inheritance.

Scammers use AI to generate documents that appear to be official government documents or letters that show their victim is entitled to a large inheritance.  Scammers will also ask that their victim provide their identification details.  Once the victim’s ID and payment is received, the scammer will ordinarily go silent.

It has now become more common for scammers to review a potential victim’s social media accounts and tailor the story to their victim.  Scams are therefore less likely to be about the estate of a Nigerian Prince but rather someone from your past who you have a connection with which makes the scam more believable.

Romance Scams

Scammers often create fake profiles or pose as celebrities on social media or dating apps in order to start a form of relationship (romantic or friendly) with their victims.  Scammers also create fake profiles with AI generated photos and videos to create a convincing online presence, leading their victims to believe that the person they are speaking to is legitimate. 

Once those scammers have gained their victim’s trust, scammers will start requesting money, gift cards, or cryptocurrency be sent to them.   Usually the love interest will be trapped in a foreign country and desperately want to join the victim in Australia and will request various funds to facilitate their travel, visa and other expenses.

Investment Scams

Investment scams are found in many different forms.  The general premise of an investment scam is that scammers will contact their victims posing as a financial advisor, bank or investment company, offering investments that promise large returns. 

With the developments in AI, scammers have improved the quality of their scams by creating websites that appear to be legitimate and trustworthy investment platforms.  Some websites show the “profitability” of your investment.  However, when victims request to withdraw their earnings, scammers will either refuse to release those funds, request a further deposit be made, or even go silent.  In any circumstance, the victim is unlikely to recover any of their funds.

We have seen scams recently where the scammers convinced the victim of the legitimacy of the investment by a combination of telephone conversations and web portals.  Client’s will be guided through the phoney investment on the phone, while watching the website reflect the apparent changes.

Another common tactic with investment scams is to actually make an initial payment to the victim.  For example, the victim might put in $1,000.00 to test the waters, and the scammers will actually make a payment to the victim of $1,500.00 “proving” the investment works.  Once the victim has this proof, they feel confident to invest the rest of their savings, which are then stolen by the scammers.

Recovery Scams

Recovery scams are used on victims of previous scams, leading to the victim to be scammed a second time.  Scammers will pretend to be able to recover the original loss of funds, cryptocurrency or other form of financial loss for a fee.

Scammers will contact previous victims posing as government agencies, lawyers or fund recovery services.  Some scammers use AI to create fake websites or advertisements to entice previous victims of scams to engage their services to recover lost funds.  Once a scammer has come into contact with a previous victim of a scam, they will ordinarily request your identification details and an upfront fee to recover previously lost funds.  

Common Features

There are two common features of almost every scam.  The first is that no matter how much money you pay, there is always some other hurdle that is thrown up that requires more money.  It might be an immigration fee, a government tax in respect of estate payments, or a withdrawal processing fee.  This aspect plays on a psychological phenomena known as “escalating commitment to failure” where the victim has invested so much money, they cannot psychologically accept they have been scammed and “just one more payment” will prove they were right all along.

The second is that scammers will often ask the victim to participate in a dubious or illegal activity.  For example, they might request money to bribe a government official.  They will usually assure the victim that it is just how “business is done” in the relevant country.  The purpose of this is to make the victim feel like they are conspirators and cannot go to the authorities about the scam without exposing their own potentially criminal activity.

How we can help

In the event you are the victim of a scam, there is very little chance that you will be able to recover your financial losses.  Usually any money paid has left Australia the moment it is paid and it is almost impossible to trace, let alone recover.

The best way to avoid being scammed is to stop and think before making any payments.  If an offer sounds too good to be true, it usually is.  If you are uncertain about whether a transaction is legitimate, you can contact our experienced lawyers to obtain advice prior to making any payments to an unknown third party.

However, if you have already begun to make payments but you have grown suspicious about whether or not the transaction is legitimate, you should immediately stop any further payments until you have obtained legal advice.  You may not be able to recover what you have already paid, but you might be able to prevent making the loss even greater.