Taking the fear out of threat and penalty scams

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Taking the fear out of threat and penalty scams

How to spot a threat and penalty scam before it finds you

In 2023, the Australian Competition and Consumer Commission reported Aussies lost $13.9 million to threat and penalty scams with the younger age group 18-24, reporting the highest losses of $7.6 million*. But they’re not alone. Other vulnerable people are at risk too.
So it pays to know how to spot a scam before it spots you.

What’s a threat and penalty scam?

A threat and penalty scam (also known as an extortion scam) is when a scammer claims you owe money and threatens you with legal action, arrest or physical harm if you don’t pay. They can also stoop to blackmail by threatening to share intimate images of you.

The scam works by using fear to pressure you into giving away your money.

Extorting our most vulnerable

Threat and penalty scammers are also known to target vulnerable people, especially:
• The young – scammers often try to trick them into sexting intimate photos or videos,
then use the images to blackmail them into handing over money
• The elderly – scammers often claim to be from Centrelink or the Australian Taxation Office, then claim a person has an overpayment or tax debt they need to repay
• Immigrants – scammers often pretend to be from the Department of Home Affairs or police, then threaten to deport a person unless they pay a fee to fix a visa issue.

How it works

First, the scammer will unexpectedly contact you by phone, message or email and claim to be from a Government department, debt collection agency or trusted company.
Next, the scammer will say you owe money and threaten you with legal action, arrest or harm if you don’t pay a fee, fine or lumpsum right away.
Scammers will often demand to be paid using unusual methods such as gift or store cards, international money transfers or cryptocurrency.
Finally, the scammer may not give up and often become progressively more aggressive and threatening when they don’t get their way.

Here’s how it happened to Chris

ING customer Chris* received a friend request from an unknown person on Instagram.

Soon after, they contacted Chris to say they would be locked out of their gaming account
and arrested if they didn’t pay a fine for an ‘overdue’ gaming subscription.

Chris was suspicious so they ignored the threat.

Later, however, Chris was again contacted by the scammer who threatened to post compromising photos if he didn’t pay $5,000.

While Chris knew no such images existed, this time they reported the scam to the police.

* Name changed for privacy

5 signs it’s a threat and penalty scam

Every crime has it’s MO, so here are some good clues it’s a threat and penalty scam.

An unknown person unexpectedly calls, messages or emails you.
They claim to be from a government agency, debt collection agency or trusted company.
They say you owe money and need to pay a fee or fine to fix the matter.
They threaten you with legal action, arrest or worse if you refuse to pay right away.
They ask you to transfer money to an account for safekeeping or further investigation.

Specific things you can do

To help avoid threat and penalty you should:

Never feel pressured by a threatening, unknown person asking for money
Always check an organisation’s website, phone number or email address yourself
Never share your personal or banking details with someone you don’t know and trust
Never pay anyone by unusual methods such as gift cards, store cards or cryptocurrency
If you’re worried about your personal safety contact police ASAP.

Don’t leave yourself exposed – never share or post images online that you wouldn’t want the whole world to see.

Better yet: Stop, Reflect & Protect

Whatever the type of scam, keeping these simple steps top of mind could help prevent you from becoming a scam statistic.

3 steps to spot scams before they find you

1. Stop. Before sharing any details or money, take a breather to assess if you really know or trust who’s asking.

2. Reflect. Ask yourself: ‘Would a real organisation threaten me like that?’

3. Protect. Don’t wait to act if things seem fishy – don’t proceed and if you’re an ING customer and notice unusual activity on your account, place your card on hold in the ING App and call our 24/7 scams line on 1800 052 743.

For our latest security alerts and more ways ING can help to protect you and your money, visit ing.com.au/security

*The Australian Competition and Consumer Commission (2023), https://www.scamwatch.gov.au/research-and-resources/scam-statistics?scamid=32&date=2023

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