The Betrayal

Hey Scott
 
We have – well had –  a much-loved receptionist. She was like a second mum to our child, even taking paid time off to go to the grandparent/important person day at her school. She was paid above award wages and has been looked after with bonuses and gifts for the last 17 years. Here is the kicker: I caught her stealing! Cash out of my wallet – on my birthday! The look on her face as I watched from the door was not one of guilt or fear of getting caught, but quiet intent, as if it was normal activity. I pretended not to notice, but I was shocked to my core. This was right before she went on holiday. While she was away, I called the local detectives and asked for advice. Here’s where I have a conflict: do we prosecute or not?
 
Sally

Hi Sally,
 
Should you prosecute?
 
HELL YES.
 
If I were in your shoes I’d want to see her face a (pre-morning coffee) Judge Judy.
 
And I’d also employ a forensic accountant to look over your accounts and see if she’s stolen money from the business, not just your wallet. If they find anything, you should hand that over to the cops and add it to the rap sheet.

I know the hurt and betrayal must be weighing on you, and the prospect of a drawn-out drama might fill you with dread, but I’d encourage you to see it through – not only as a sense of resolution for you but as a way of helping her next boss.

Scott.

Lovestruck

Hi Scott,
 
Last year I got caught in a romance scam and lost $240k. I was just so stupid to send money to the stranger, but I thought there were lots of signs to believe him. I haven’t told any of my family about this. I’m 56 years old, a single mother and working full time as a nurse. I didn’t have $240k, so I sold my house (making $100k profit) and then took out three loans for the rest. I also moved into my adult daughter's house, so my current expense is the bare minimum and I am so grateful. I would appreciate it if you could give me any advice on how to pay this off quickly.
 
Kelly
 
Hey Kelly,
 
Each week my editor wades through hundreds of questions and gives me five (or so) to look at.
 
He wrote a note on yours that simply read “awful”.
 
Indeed.  You’re paying $140,000 off at high(er) interest rates, you’re living with your daughter, and you’re a dozen years from retirement.
 
Here’s what I’d suggest.
 
First, don’t let them rob you again: these scammers took you for $240,000 – but don’t let them take your self-respect. The fact is that romance scams are a multibillion-dollar a year business. You’re not the first, and (sadly) you won’t be the last.
 
Second, don’t suffer in silence. This is too big to shoulder on your own. You owe it to your daughter to explain what’s happened.
 
Finally, go and see a free financial counsellor (call 1800 007 007). The banks are running a mile from all this scam business, but there may be a 1% chance that they’ve lent irresponsibly, and if I were in your situation I’d be chasing down that 1%.
 
Thank you for sharing.
 
Scott

You Have 60 Seconds to Do This NOW

Hi Scott,
 
My good friend wants to invest $100,000 into a crypto-style investment strategy called GsPro. They say in 18 months you will 10 x your investment. What advice do you have for her as she feels she needs to take a risk to make some money. She is feeling behind where she should be and doesn’t trust the regular banks and mainstream investment options. Would she be better off with ETFs as they’re a relatively simple, set-and-forget strategy?

Heidi
 
Hola Heidi,
 
I have no advice for her, only for you.
 
Are you ready?
 
I want you to grab your car keys and get in your car. While you’re driving, ring your friend and tell her you have something life-changingly important that you need to speak to her about, immediately, in person.
 
When you get to her house, give her a hug. As you’re doing this, reach around and take off her belt. As in slip it out of her pants. Use her belt to strap her to her dining chair. Then take out your phone and turn the flashlight on and shine it in her eyes, while repeatedly yelling at her:
 
“DO YOU WANT TO LOSE $100,000? THIS IS A SCAM. THE BAREFOOT INVESTOR TOLD ME SO!”
 
You are only allowed to unshackle her when she promises you that she won’t give her hard-earned money to strangers on the interwebs.
 
Hurry up, Heidi. Your time starts now. Your friend needs you.
 
Give it a belt.

Deep Fake

My father still washes the dishes by hand each night because he doesn’t ‘trust’ the dishwasher.
 
(And my parents have had a dishwasher for 30 years. How’s that for staying power?)
 
The other night, while he was doing the dishes, I showed him a Facebook video of me enthusiastically promoting a scam trading program, calling it an “exceptional financial collaboration”.

As he watched I could see his old soap suds circling the drain:
 
It sure looked like his son. It sure sounded like his son. What the heck was going on?
 
I explained to him that it was a deep fake video … possibly the first one he’d ever seen.
 
“Was it the bloody Russians?” he asked innocently.
 
“No idea,” I replied.
 
All we knew was that someone had taken footage of me from an old interview on Sky News and manipulated it into something very weird.
 
See, for all the hype of artificial intelligence, so far the big winners have been the scammers, who have weaponised deep fake videos and voice cloning to systematically con tens of billions of dollars a year from victims across the globe.
 
There are now 46 million cyber attacks launched each day, and many of them are targeted at financial institutions, according to a report in the Financial Times.
 
That explains why the world’s biggest bank, JP Morgan, spends $23 billion a year on technology, and employs more engineers than Google or Amazon, largely to stop cyber crooks.
 
And all this has left me wondering whether the dinky little credit union I bank with (which still has biros chained to the desk) will have the budget to fight the hackers and keep me safe.
 
(Annoyingly, after a career of bashing the Big 4 banks, it’s dawning on me that perhaps they’ll be some of the only institutions who will be able to afford to build an AI army.)
 
And what about my deep fake problem?
 
Well, when I reported it to Facebook, they called and said they were immediately dispatching a crack team of ninjas to the Kremlin to duke it out with the Ruskies.
 
Yeah, nah.
 
They didn’t even bother responding.  
 
Yet even if they did bother to shut down the page, my guess is another 20 videos would automatically pop up. It’s like trying to get rid of thistles in my paddocks with vinegar and hot water. Yes, it’s environmentally friendly, Liz, but all the farmers around town are laughing at me!
 
Besides, Zuckerberg is up to his zucks right now taking deep fake videos to a very freaky new level. In an interview with tech podcaster Lex Fridman last year, Zuckerberg said his company was working on AI technology that will help you create a virtual avatar – or human-like clone of yourself – which people will be able to ‘have conversations’ with.
 
True dinks.
 
Zuckerberg is creating his own (Facebook) Frankenstein … and that story turned out okay, right?
 
Tread Your Own Path!

Generally I don’t speak about politics in this column, but last week my editor requested (read: demanded) that I write about the changes to tax cuts. Now I know why. Holy Hector, what a response! So, here we go again …

Watch Your Back, Barefoot

Scott,

I like you. And I like your advice. Which makes me want to give you some of my advice. Watch your step. You’re a finance guy, right? Let me run some numbers by you: you said the three credit bureaus in Australia made $521 million collectively. You are challenging their entire business model. Do you see where I am going with this? You are a pretty bright fellow, and I respect your advice (and BIG BALLS!). Just remember, an American president got murdered in broad daylight.
 
Tony
 
Hi Tony
 
Thanks for your concern, but I don’t think the credit bureaus take me very seriously. After all, they have highly paid lobbyists who have better access to politicians than I’ll ever have.
 
Still, I think locking your credit file is one of the best ways to safeguard your identity, and to stop scammers who’ve accessed your personal details via a hack from applying for credit in your name.
 
The most logical solution would be to put a ‘lock and alert’ system on all credit reports. That is, give people the ability to lock their credit file so no one can see it (without the customer’s consent) and send an immediate two-factor-authenticated alert to the customer if someone tries to access it.
 
 In America, the government forces credit bureaus to offer exactly this service. I’ve asked federal Finance Minister Stephen Jones why he doesn’t follow their lead. He told me he’d look into it, but I haven’t heard anything for months. Bang!

I’ve never seen anything like it

In almost 20 years of writing this column, I’ve never seen anything like it.
 
Just this year, I’ve had the following people email me:
 
A veteran policeman who was scammed out of his life savings.
 
An experienced tech journalist who was swindled for ten grand.
 
And literally hundreds of readers who’ve lost amounts ranging from $1,000 to $1 million.
 
What the hell is going on?
 
Scams are red hot right now … in fact, they’ve increased a staggering 80% in the last year alone.
 
Most of it, to be honest, is the run-of-the-mill scammy stuff that you and I try our best to avoid, like taking dodgy calls from dodgy people in dodgy overseas call centres, or romance scams, or clicking on fake links and text messages.
 
Yet don’t get too comfy – an army of robots is coming for your money.
 
A new artificial intelligence app called VoiceLab can recreate your voice with just a three-second clip which it can gain from a spam call (you answer: “Hello, who is this?”) or, more likely, from one of your TikTok posts.
 
Scammers have even been using voice-cloning tech to trick parents into believing their kids are calling them in a panic and needing money fast! (Which is horrifying, but also makes me want to try it out on my mum, who complains I never call her anymore.)
 
Yet what the scammers are really after is voice authentication. The Australian Tax Office, Centrelink and many banks give customers the option of using their voice as a way to confirm their ID when they call or want to make a transaction. Bingo!
 
And if that doesn’t freak you out, how about the fact that criminals are using machine learning AI to hack your passwords (yes, the same password you’ve used for every single login since 2015).
 
So, what’s the answer?
 
I don’t think the government can do much: the tech and the scammers are moving too damned fast.
 
And Aussie banks are lobbying furiously behind the scenes to avoid being on the hook for their customers’ losses (as UK banks will soon be forced to be). In truth, the banks are as good as useless. Last year the Big Four managed to stop just 13% of scam payments. Worse, the banks only compensated their customers for around 2% to 5% of what they lost, according to ASIC.
 
So, given the leaves are falling and the nights are getting cooler, one way to warm your cockles is to grab a bottle of wine, take a moment, and make sure you have two-factor authentication set up on all your accounts. And, if you’re really concerned, lock down your credit file (though, according to the first question below, telling you this could get me killed).
 
Tread Your Own Path!

Barefoot Got Hacked!

Hi Scott,
 
Have you been hacked? Recently I was tagged by ‘Scott Pape’ from a Facebook page congratulating me on being one of 20 people chosen to ‘win $1,000’. According to a Facebook user called ihack on this page, all I had to do was to ‘follow a few simple steps’ such as clicking on the link to the ‘official website’ and registering my credit card details. I have reported the post, but I also wanted to bring this to your attention.
 
Sarah
 
Hi Sarah,
 
Yes, this is one of the many Facebook scams that target me, or more specifically my followers.
 
Let me be crystal clear:
 
I will never contact you via social media, and for a very good reason: I can’t.
 
You see, my long-serving assistant controls all my social media profiles and I don’t have any of the logins. Honestly, I spend zero time on social media.
 
As in none.
 
Finally, Sarah, if anyone actually fell for this scam it’s a sign that it’s time to delete their Facebook account. After all, the scammer’s profile name is ‘ihack’?!
 
Get off the grass!

Scott.

My Wife Has No Idea What I’ve Done …

Hi Scott

I write this with a heavy heart. Three days ago I found out that the investments that my wife and I were making were a scam. We have lost $90,000, our entire house deposit savings. The thing is, she doesn’t know yet. Tough pill to swallow.

This wasn’t a run-of-the-mill scam like clicking on a link or allowing a hacker access to our banking details – it was a sophisticated scam involving purchasing of ‘shares’ for multiple ‘companies’. What concerns me most is how do I face the shame when telling her? (Yes, she was on board with it at the time, but it was my idea.) During our Barefoot Date Nights, along with other topics, we discuss the shares we’ve ‘purchased’. This is probably my biggest fear – letting her down.

And where to from here? Four years of savings, all gone. Thanks to Barefoot we’ve been debt free, but I’m in such disbelief that our house deposit has vanished. Your words keep replaying through my head: “put it into a high-interest savings account if you plan on using it in the next five years”. Fool me once ...

Steve

Hi Steve

I’m so sorry this has happened to you.

The only thing you can do is to be honest with her. Admit that you screwed up and then quickly ‘assume the brace position’, as they say on the Qantas safety cards.

Then, once the turbulence has passed, I have a practical suggestion for you:

I want you to go on a Barefoot Date Night and ask yourselves the following questions:

– What can we learn from getting scammed?
– How could this be a good thing?
– What are we grateful for?

Look, this scumbag scammer already took your money. Don’t let him steal your most precious assets: your self-esteem and your time. You two got yourself out of debt and built up a deposit in four years. You’re still standing. You have each other. You’ll build back better. You got this.

Scott.

Our Son-in-Law is a Nothing Burger

Hi Scott,

Our 48-year-old daughter was $2,000 away from paying off her house when her husband of 23 years told her that he had used the redraw facility attached to their housing loan to withdraw $150,000 to invest in a cryptocurrency scam! He has now left her with $5 in the bank and two young boys to support. It seems our daughter was too trusting way back (23 years ago) when the home loan was set up. Even though it was in both names, the redraw facility required only his signature.

It has been extremely stressful and embarrassing, and like a snowball as unpaid bills have rolled in. As retirees we now find ourselves with a second family to support. All avenues for help have been fruitless so far. Can you give us any advice? Also, please alert other trusting young wives that they must have two signatures on a redraw facility or they may find themselves in this same devastating situation.

Tania

Hey Tania

It sounds like your son-in-law is an addicted gambler.

The fact that he was caught up in a crypto scam is neither here nor there – it all ends the same way:

The scammer (or betting company) ends up with all the money, the punter is lumped with the losses, and tragically, as is the case with your daughter, there’s often an innocent partner who becomes collateral damage.

So what advice do I have?

She has two choices: work it out, or kick his arse to the curb.

If she chooses to stay with him, I’d suggest she insist he get professional counselling (call Gambler’s Help on 1800 858 858). If she’s not planning on staying with him, I’d get her to speak to a family lawyer and an accountant and set up plans for life as a single parent.

Yet I’ll tell you one thing that’s totally off the table: getting the money back. The horse hasn’t bolted, it’s dead. No amount of flogging your son-in-law will bring it back. At some point they have to put it behind them and move forward financially (together or apart).

Scott

The Bitcoin Babe

Dear Scott,

I have been trying to find a partner and get married for a while. Recently, I was matched with a guy on a dating app and we got to talking. He kept saying money is very important to him. He said he’d like a partner who is a ‘digital shepherd’ who would carry his phones and laptops and work from anywhere in the world. I’m an engineer, love my job, and don’t want to be a digital shepherd, yet the idea of having a husband got me interested.

He said he’d teach me to trade crypto, so I put $2,000 of my hard-earned money into the FTX Pro app.

After a while I got suspicious and said I’d like to do it either face to face (I have never met him) or stop and get my money back. He got very defensive and threatening, and told me I’d face consequences and he’d stop talking to me. I have reported him to cyber crime, and reported his profile on the dating app. But my money is still trapped in FTX Pro. How can I get it back?

Shyla

Hi Shyla

There is no way my answer is going to be anywhere near as entertaining as your question!

So, in summary, a random dude you met on the internet who told you he was looking for a shepherd … turned out to be a wolf. Don’t beat yourself up: you’re not the first person this has happened to, nor will you be the last!

Oh, and don’t feel bad about losing money to a scammer, either. Sequoia Capital is a legendary American fund manager that employs the smartest people in the world, including the very best graduates from Harvard, Stanford and Yale.

Well, these geniuses invested $US210 million ($A313 million) into the crypto exchange you used, FTX. FTX is run by 30-year-old Sam Bankman-Fried, hailed as the ‘next Warren Buffett’. Sequoia loved the fact that Sam played video games in their investment meetings instead of listening to them.

Well, it turns out Sam was also a wolf. This week his crypto exchange has collapsed, with billions in customer deposits apparently gone.

Who would’ve thought that a 30-year-old living in the Bahamas with a 10-person “drug-fuelled sexual polycule” (tip: don’t google that term on your work computer) would turn out to be a little wolfy?

Sequoia, meanwhile, has written down their $US210 million investment to $0.

I hope I’m wrong, but I suspect you might need to do the same.

Scott.

How to be unhackable

This is an open letter to the Federal Minister for Financial Services, Stephen Jones.

Minister,

The cyber hacks on Optus and Medibank have justifiably freaked everyone out.

And as you know the 17 million records that have been stolen in the last month are a drop in the ocean compared to the number of data breaches that never make it into the media.

So today I’m writing to you with a simple solution.

It basically involves putting a ‘lock’ on every Australian’s private financial information – plus an ‘alert’ that lets us know anytime someone comes near our personal data.

In this month’s budget the Government put aside $5 million to investigate the hacks. However, setting my idea up won’t cost the Australian people (or the Government) a single cent.

All you’ll need is to muster up some political ticker, Minister.

Let me explain:

A criminal can hack a person’s ID and then apply for credit in their name.

When the bank gets the criminal’s application, their system automatically checks the customer’s credit file.

Importantly, the customer does not get an alert telling them the bank has checked their credit file.

The criminal can use this to their advantage, often clocking up dozens of credit card and personal loan applications as quickly as they can.

So, the most logical solution would be to put a ‘lock and alert’ system on our credit reports. That is, lock every credit file so no one can see it (without the customer’s consent) and send an immediate alert to the customer if someone tries to access it.

But there’s one problem (or three actually).

There are three credit bureaus in Australia (Equifax, Experian and illion) who keep credit files on practically every Australian adult.

They are owned by large investors, and last year they collectively made $521 million in revenue selling our private data to financial institutions, according to IBISWorld.

The problem is, putting a lock on our credit files would put a lock on their profits. They’re not going to let it happen, and they pay highly paid lobbyists to make sure the government doesn’t allow it.

Those lobbyists will tell you, Minister, that “it can’t be done”.

But it can. In fact, in America, the government has already forced credit bureaus to offer it. And in Australia the ‘lock and alert’ technology already exists, via an app called Credit Savvy.

So, my suggestion is that the government (i.e. YOU, Minister) should force the credit bureaus to automatically lock down our credit files and provide us with an alert service. This will block criminals while still allowing legitimate credit inquiries to be made.

The fact is, Minister, these credit bureaus are like Facebook. Our private data is the product they sell, and their customers will pay handsomely for that data. Let’s be honest: the credit bureaus’ only allegiance is to their shareholders.

Yet your allegiance is to the Australian people you have the honour of representing. So, we need you to stare down these billion-dollar companies and stand up for us.

As the Minister for Financial Services, I know your worst nightmare is that one of our banks will get hacked, which some analysts (like Standard & Poor’s) suggest is only a matter of time.

Right now you have the power to protect all Australians with a stroke of a pen.

Will you?

Tread Your Own Path!

P.S. I invited the Minister to respond (in 140 characters or less). Here is his response:

“Sounds good. We’ll take a look. Stephen”.

Please open this right now, it’s very important

Today I’m going to show you the exact steps that will stop scammers from running up credit in your name.

Best of all, it’s fast, easy, and free.

Yet before I do, I want to take a moment to reveal the name of a company that made MILLIONS from the Optus Hack.

That company’s name is Equifax and they’re a credit bureau.

This week, in a blind panic, Optus agreed to purchase 12-month subscriptions to Equifax’s ‘Credit Protect’ service for their most affected customers. This service sends an alert if your credit file is accessed (by a scammer applying for credit in your name using stolen docs), and it costs $14.95 a month per person.

That’s not just a huge amount of dough for Equifax, it’s insanely great advertising to boot!

So let me square the ledger …

Equifax is the financial equivalent of Mark Zuckerberg. They hoover up your personal private credit information and sell it off to any financial institution they damn well please. Yet unlike Zuck, if you want to monitor who they’re pimping your private data out to, well, you have to pay them $14.95 a month*!

*Except you don’t.

I’m afraid Optus has been scammed again.

They didn’t need to pay Equifax all that money. There’s a much better workaround, and it’s free.

I want you to pay close attention to this, even if you aren’t an Optus customer. After all, just this week Standard and Poor’s came out saying that Aussie banks are among the most vulnerable to a cyber attack in the region because of their work from home policies and all the stuff they’ve got in the cloud.

Bottomline?

This isn’t the first mass hack, and it won’t be the last.

Now, I don’t think simply having an alert on your credit file provides you enough protection.

Here’s the way I think about it:

An alert is like having a security camera on your front door.

You’ll get an alert that you’re getting robbed … but your TV still gets flogged!

If you are scammed – and one in four Aussies have been – it can take upwards of 30 hours to sort everything out, (most of which involves sitting in long telephone bank cues, listening to Daryl Braithwaite’s Horses.)

Instead, what you want is a big arse lock on your door that makes it impossible for the robber to get in your house.

Thankfully there is one app that will let you put a lock on your credit file.

That company’s name is CreditSavvy, and it’s a division of the Commonwealth Bank. (The fact that they’re owned by big yellow gives me a certain level of comfort … though I still wouldn’t trust them educating my kids).

Creditsavvy bills themselves like a fitness coach for debt, which in itself is kind of weird. Their schtick is that they calculate a personal ‘credit score’, which for me is about as useful as the score I give my four year old daughter’s nightly dance concerts:

“10 out of 10 Honey, BRAVO!”

In both cases we’re just needy adults desperately trying to keep your attention. (Credit Savvy makes its money by selling leads to finance companies to get you into debt).

However, part of their app that I’m interested in allows you to lock your credit file with a swipe or click of a button.

So here’s what I want you to do, step-by-step to lock down your credit file so that scammers can’t rip you off.

Step 1: Download the Credit Savvy app (either in the Apple or Google app stores).

Step 2: Verify your details (I used my driver’s licence and Medicare card).

Step 3: Press “protect” from the bottom navigation.

Step 4: Press “Request a ban”. Credit Savvy will then let the other credit agencies know you’ve got a ban on your file within 2 business days.

Step 5: On the 16th day the Credit Savvy app will remind you that your pause is ending. When you get that alert – and this is important – click “ban my credit report for 12-months”.

And that’s it!

From then on if anyone tries to access your credit file, the Credit Savvy app will alert you.

Though it will also be locked so the bank or financial institution won’t be able to access your file. However, this will not count against you. To be clear, it will not harm your ability to take out credit.

Now if you are applying for credit (or say moving home and applying for utilities and the like), all you need to do is temporarily lift the ban on your credit file for a week or so. And then put that lock straight back on using the Credit Savvy app.

Tread Your Own Path!

Barefoot Calls a Single Mother in the Middle of the Night

Hi Scott

I’m a 57-year-old single mum. I bought a property 3 years ago and work, as a nurse, almost every day to make ends meet. I get anxious when I think about the age I will be when I finally pay off my house, age 71! Will I even be able to work at that age? Then I start thinking of how to make money quickly. The lotto obviously is not going my way, so I looked into the stock markets and opened an account with CoinDaq. They are very helpful, but I do feel uneasy. I invested $2,500 and they supported me, so I added $2,500. I made 23% profit, about $1176.17. Which I’m excited about but somehow it seems too good to be true? Now they try to convince me to take $50,000 from my super and then I will make up to $9,000 a month with a ‘bonus’ of about $230,000 every 3 years. What is your opinion about this?

Kind regards

Linda

Linda,

As I’m reading this, it’s currently 4:35 am, (see above).

I’m debating whether I call you right now and completely FREAK YOU OUT.

It would go something like this:

“Good morning, it’s the Barefoot Investor. You are being robbed RIGHT NOW!”

(I’d scream ‘RIGHT NOW’ down the line, for dramatic effect).

Then you’d bolt upright in bed, and listen nervously for the burglars rifling through your stuff.

However, they didn’t climb through a window, and nab your telly Linda. They came in via your computer, and they convinced you to willingly hand over your cash.

Linda, they are scammers.

Literally the very first website that comes up when you Google ‘CoinDaq’ says:

“Coindaq is a scam site”.

The robbers have already stuffed $5,000 of your money into their duffle bag. Yet they haven’t left. They’re now searching around for the big pay day: your superannuation.

Again, to be clear:

YOU ARE BEING ROBBED RIGHT NOW!

No matter what they tell you, never ever speak to them again.

Scott.

Chilled to the Bone

Scott,

I felt chilled to the bone when I read about that poor family who lost their house deposit to scammers. Is there anything we can do for them? They have seven kids! It just doesn’t seem fair that the bank would only refund them $5,000 and the cops say ‘too bad’. There has to be justice!

Raj

Hi Raj,

I feel like I need to take a cold bath and scrub myself clean after the week I’ve had.

I’ve been inundated by readers sharing their scam stories with me. I also spent the week researching what could be done.

Here are some back-of-the-envelope calculations:

Last year Aussies lost $227 million to payment redirection scams. Yet we also know that roughly a third of people are too embarrassed to report they’ve been duped, so let’s call it $300 million.

Five years ago banks in the Netherlands introduced account name checking and it reduced this type of fraud by a staggering 81%! So that would save consumers a massive $243,000,000.

Yet that’s the customers’ money, and who gives a toss about them?

So let’s look at it from the bank’s perspective.

How many of the bank’s staff hours are chewed up dealing with those $300 million in losses?

From chasing the scammers, to dealing with the heartbreak of customers who lost their life savings, and even sometimes, maybe, kinda, partly refunding them.

It’d have to cost the banks tens of millions, at least.

It seems like common sense to me. Kind of like, if your bank makes you give them the account name of the person you’re transferring money to – it’s because they’re actually going to cross-check it.

So I had a commonsense chat with Stephen Jones, the Minister for Financial Services, this week.

I asked him if he could, say, get all the bank chiefs in a headlock and not let them go until they all agreed to check account names, and in doing so save their customers as much as $243 million and untold amounts of heartbreak.

He said that’s a really good question and one that he’ll be asking the banks. But he thought my headlock idea was taking things a little too far. I also gave him the details of the young family with seven kids who were scammed out of their deposit.

Let’s hope commonsense prevails.

Scott.

Chasing a Ghost

Dear Scott,

Just before Covid hit, I paid a $3,000 deposit for a new fence. Then Covid hit, and everything stopped. After restrictions were lifted we got in contact with the fencer and he started all the excuses under the sun about why he wasn’t able to start the job. He finally admitted he was not going to do it. We asked for our deposit back, we still have not got it. We have told him we will take the matter to small claims court but this has made no difference to him. The trouble is we only have his first name, his bank account details, his phone number and his company name. What can I do?

Danielle

Hi Danielle,

You can do an ASIC search on his company name and find his registered details, and with that possibly take him to a small claims tribunal (like VCAT in Victoria).

So by all means, give it a go.

Having said that, he sounds like a crook. And it also sounds like this isn’t his first rodeo. So you could end up spending a lot of time, energy and emotion chasing this guy … and you still may never get the money back.

Look, I don’t want to sound too woo-woo, but sometimes you just have to let these things go …

So if it were me, I’d put that energy into finding a good tradie who’ll build you a good fence.

(And know that, one day, that guy’s going to get his nuts nailed to a fence.)

Scott.

Why ING Sucks

Fiona is a young high school maths teacher who has a lot on her mind.

She’s knee deep in planning her wedding, so her head is full with nuptial numbers:

The guest list, her wedding dress, flowers, bridesmaid dresses … bridesmaids.

One afternoon recently her phone rang.

It was a private number.

As with most people, Fiona’s reflex was to ignore it and let it go to voicemail, but then she remembered she was expecting a call from a supplier about the wedding, so she answered.

Turns out it was Telstra.

“The Telstra rep seemed to know all my details, and they ran me through the privacy stuff. Then they told me that my internet server had been compromised and that I was vulnerable to hackers”, she told me.

Fiona was a little suspicious … but the rep directed her to a Telstra website and asked her to put in her IP address. Sure enough it showed that she had in fact been hacked.

“O.M.G!”

From there, she was directed to open her emails, and then her ING banking app.

The Telstra employee (who had given Fiona her Telstra employee ID for verification purposes) asked her to write down a long series of numbers that she would need to give to the technician that would be visiting her house the next day and reset her internet.

While Fiona was busy writing down numbers, her fiancé arrived home from work and went to the study to do some banking. A few moments later he stormed out and to the lounge room and waved his ING app in her face.

The $20,000 they’d saved up in their ING account to pay for their wedding?

Gone.

Fiona had in fact been talking to a scammer all this time.

“Please make me look silly to your readers,” Fiona pleaded as she told me her story. “Because I am silly. I thought that these scams only happened to Boomers!”

Yet here’s what got my goat:

The scammers hit her account every 30 seconds, each time taking random amounts:

$546, $990, $7.50, $1,000, $99.

And they kept smashing the account until all $20,000 was drained.

Yet get this: the account name the money was going to was spelt “Drothy”.

OH COME ON!

We’re not in Kansas anymore, ING!

Grab the Tin Man and Toto and go bite these buggers!

Seriously, you’d think that Australia’s fifth largest bank – which trousered $549 million in profits after tax last year – would have tipped even just a little bit of that dough into having the most basic banking safety features … like, say, a trigger that detects when a customer is potentially getting scammed and puts a temporary lock on the account?

Nope.

Yet it gets worse.

After a lot of back and forth and tears from Fiona, ING agreed to pay her half the money back.

Half?

That makes absolutely no sense to me.

Either ING believes it’s not their problem, in which case they would tell her (politely) to go jump. Or they admit they should have detected the fraud and pay the money back.

So which is it?

You can’t get half up the duff, Drothy!

In fact, ING’s behaviour is depressingly very bank-like:

“When customers get scammed, it’s a lottery if they get reimbursed by their bank. Sometimes it’s 50%, sometimes it’s 75%, sometimes we find they get nothing”, says Gerard Brody from the Consumer Action Law Centre.

ING’s logo is a lion, which is kind of apt.

In The Wizard of Oz the cowardly lion is given a dish of courage to drink, which instantly transforms him and allows him to protect Dorothy.

Time to lick the bowl, ING.

You’re Australia’s most recommended bank. Start acting like it.

And if, dear reader, you’re thinking “There’s no way I would have fallen for a Telstra scam”, then you really need to read the following question and see how you would have fared …

Tread Your Own Path!

A Scammer Stole Our Family Home!

Hi Scott,

My husband and I have seven kids, aged from one to 13. Five weeks ago we finally took the plunge and bought a big family home!

After the deal was done, our solicitor, Jenny, called and directed us to pay our deposit of $165,000 to the trust account. Then at 6:47am the next morning Jenny emailed us with a ‘correction’ to that account. I thought that was a bit weird, so I emailed back to confirm. Jenny came back almost immediately. All good.

So my husband took the morning off work and went to the bank to wire the money to the account. He paid the $35 bank transfer fee and made sure the teller checked and rechecked the numbers. That night we celebrated!

Then, two days ago, Jenny called to ask us where the deposit money was! Unbeknownst to her, hackers had taken over her computer and communicated with us from her exact email address, posing as her, using her exact language!

So we immediately called the police. They did an investigation and found that the scammer is in Kenya, so it was out of their jurisdiction. They also told us that Interpol doesn’t deal with ‘small amounts’. “There’s nothing you can do”, the police told us.

We have spent hours on the phone to our bank. They have given us $5,000 on the proviso that we drop any action against them. To say we are gutted is an understatement. Please alert all your readers to the risk of hackers accessing online transactions.

Nathan and Natalie

Hi Guys,

My heart absolutely breaks for you.

Here’s what you learned the hard way … that most people don’t know:

When you transfer money your bank always asks for the name of the account that you’re transferring the money to. Logically, you’d think that’s so their systems match and verify the account name.

But they don’t.

You could write ‘IMA BANK ROBBER’ in the account name and it’d still go through.

(Or ‘Drothy’, take your pick.)

Yet hang on, don’t the banks invest billions of dollars a year into cutting-edge artificial intelligence so they can cross-sell you credit cards every time you log on? Surely matching the account name would be a pretty basic code for them to add on?

Well, it turns out it is, and it works!

Five years ago banks in the Netherlands introduced account name checking and it reduced this type of fraud by a staggering 81 per cent.

So … why aren’t our banks doing it?

Well it seems it’s just not a priority for them.

But it is for me.

Nathan and Natalie, let’s make a ruckus this week, and see what happens.

Stay tuned.

Scott.

Scammers Got the Lot

Hi Scott,

My daughter recently clicked on a text message from scammers saying they were from ANZ. She entered her login details and gave the scammers full access to her account. I’m worried about what will happen next. I’ve googled it a bit and have seen that scammers can change your postal address and steal your identity. Is there anything my husband and I can do to help her work through this and protect her from what they might do with her info?

Kellie

Hi Kellie,

Grab your phone. Grab your daughter. Dial 1800 595 160.

That’s the number for IDCARE, Australia’s national identity and cyber support service. Their hotline is manned by specialist identity and cybersecurity counsellors who will give your daughter free advice.

Tell your daughter not to beat herself up too much. These things happen a lot. In fact, 2.1 million Aussies experienced one or more types of personal fraud in 2021, according to the Australian Bureau of Statistics (ABS). Yet, shockingly, only half of those who experienced a scam said they reported it to an authority.

Don’t let them get away with it!

Scott.

I got scammed

So this is kind of humiliating, but I have a confession:

A few weeks ago I got scammed … and it ended up costing me $5,000.

The toughest part to swallow?

It was kind of my own fault.

See, I have a longstanding rule of never reading anything that’s written about me. I don’t Google myself. I’m almost never on social media. Heck, I don’t even manage to read all my emails (luckily I have my long-suffering editor to help go through them).

In other words, I was a sitting duck just waiting to get scammed.

Here’s what happened:

A bloke set up a Barefoot Investor beginners Facebook group – that I knew nothing about – and it quickly grew to almost 100,000 people.

This group served as his primary marketing database.

Then he set up a website called Barefoot Budgets that looked and felt like my own Barefoot website.

He charged people $120 a year to access it.

Yet, more worryingly, he was recommending that his ‘Barefoot Beginners’ speculate on risky crypto and foreign exchange apps, because he was getting kickbacks from them.

Shockingly, this was going on for a couple of YEARS.

So, while old Scotty Boy was happily bouncing along on the tractor slashing grass, this dude was making hay while the sun shined!

The first I heard about it was when someone told me they wanted a refund.

“For what?!” I grunted.

Then I Googled ‘Barefoot Budgets’.

What the slash?!

The first thing I did was pay for a membership to Barefoot Budgets. (When the sign-up form asked me “How did you hear about Barefoot Investor?” I replied, “Because I bloody wrote it!”).

The second thing I did was call my lawyer.

Here’s you: “Okay, Barefoot, it sucks to be you, but surely this doesn’t really apply to me.”

Here’s me: “Oh yes it does.”

If you’re reading this you are, statistically, one of the wealthiest people on the planet … and to 90% of the world you’re rich, and a juicy target.

That explains why self-reported losses from cybercrime hit more than $33 billion last year. And also why calls to the Government’s Australian Cyber Security Hotline (1300 292 371) surged 300% last year.

So, here’s what you should do:

First, turn on ‘multi-factor authentication’ for all your accounts. (Google it.)

Second, use a password manager. (I use Dashlane to securely store my passwords.)

Third, pay for a virtual private network (VPN). (I use ExpressVPN — for $100 a year it’s good insurance.)

Finally, learn the lesson from me: keep your eyes open, especially when it comes to your identity. And if someone is pitching you an investment opportunity online claiming to be me … it’s not me.

The wash-up was that it cost me $5,000 in legal fees to put a ‘cease and desist’ on this guy.

Or, as I like to think of it, the cost of a good tractor slasher.

Tread Your Own Path!

I just called … to say … I WANT ALL YOUR MONEY

Hi Scott,

I got a random call from a financial advisor that I have never dealt with before. I have been meaning to get some advice for a while now, so the timing was great. He projects to add $500,000 to $1 million in compounding interest by the time I retire in 22 years, plus savings on my life insurances and income — for an $8,000 set-up fee, plus a 3.5% ongoing annual management fee on my super. How do I work out if it’s legit?

Belinda

Hi Belinda,

You had me at “random call from a financial advisor that I have never dealt with before”.

What would you do if a random bloke called and began chatting you up – talking about candlelight dinners, long walks on the beach, and getting financially frisky. What would you say to him?

You’d tell the creep to bugger off!

Well, this salesperson is trying to sweet-talk himself into your financial pants, Belinda!

Instead, I’d suggest you call your super fund (hopefully a not-for-profit industry fund) and book an appointment with one of their fee-for-service financial advisors. As a general rule the first hour is free, and there’s no smutty talk.

Scott.