This guide advises Adviser Representatives on detecting and preventing fraud and scams targeting clients. It distinguishes fraud (dishonest gain without client knowledge) from scams (deceptive engagement known to the client). Advisers should watch for behavioural and transactional red flags, trust their instincts, and report concerns promptly to Netwealth.
This article is intended for use by Adviser Representatives only and is provided for adviser operational purposes. It is not designed for, and must not be relied on by, clients. Clients should not act on the information in this article and should contact their Adviser Representative or Netwealth at contact@netwealth.com.au for information relevant to their circumstances.
Fraud and/or scams are not discriminatory, and any person is susceptible to targeting by criminals. In some cases, it can be an individual or a sophisticated crime group targeting a client.
Fraud and scam activity costs Australian billions every year, with methodologies changing regularly to avoid detection.
Frauds are defined as acts involving dishonesty obtaining (including attempting to obtain) a gain or benefit, or causing a risk of loss, by deception or other means. It generally involves a third-party conducting activity without the client's knowledge. Examples of fraud include identity theft or payment fraud.
Scams on the other hand, differ from fraud in that the activity is known to the client however, the client is unaware the engagement is designed to deceive them, steal their money and/or their personal information. Common scams include romance, investment, phishing or lottery/inheritance scams.
This is where you play an integral role.
Advisers can help detect fraud and/or scams against their client(s) based on the relationship, understanding of their circumstances, behaviours and personality traits.
Through your interactions, you may pick up subtle changes in behaviours, irrational or unreasonable requests, transaction activity that is outside their general transaction patterns and/or something doesn't seem right.
Some of these are easily explainable however, following your gut instinct may go a long way in protecting your client(s).
Netwealth also has in place systems and controls to detect fraudulent activity however, by being proactive and working together, we strengthen our defences against fraud and/or scam activity.
Below lists some behavioural and transactional traits which could be indicative of fraud and/or scam activity.
Behavioural indicators
| Fraud | Scams |
| Client suddenly changes their communication method and only wishes to communicate via email or text messages. | Client wants to withdraw funds quickly, but will not elaborate the reasons behind the urgency. |
| Voice of caller does not match the client. | Client has indicated a new relationship established online, where they have not met in person. |
| Call received from an unknown number purporting to be the client. | Client has received a 'cold call' about a new investment opportunity and wants to invest quickly to avoid missing out on potential investment returns. |
| Client advises you that someone purporting to be from Netwealth called them to ask about their account. | Sudden and unexplained deviations from agreed investment strategies. |
| Family members contacting you asking about their parent(s) or family member(s) account(s) despite not having third-party authority. | Client initiatives withdrawals without advising you where they previously would have. |
| Voices can be heard in the background, coaching the client through the call. |
Transactional indicators
| Client suddenly withdraws large amounts. | Transaction activity is not consistent with their previous history. |
| Transactions do not make economic sense. | Payments using 'Pay Anyone' to third party accounts. |
| Personal information changes (e.g. bank account, phone numbers and/or email) on the client(s) account changes. |
How can I detect fraudulent activity?
- Train staff to identify red flags for fraud (eg client’s calling from a different phone number and requesting changes their account details such as email address, mobile phone number and residential address).
- Report all incidents of fraud to authorities promptly and confidentially.
- Consider internal controls to automate notifications of high-risk activity that may be a red flag for fraud.
- Have in place a robust internal and/or external audit framework.
Making a report
The above is not an exhaustive list of behaviours or transactional activity that may be considered suspicious or unusual.
The presence of a single indicator doesn't necessarily indicate fraud activity. However, the existence of multiple indicators or your gut feeling tells you something isn't quite right, you should raise your concerns immediately.
If it involves your client’s Netwealth account, contact us immediately to let us know. We can place a block on the account to protect it from potential losses until we investigate further.
It is suggested that you do not respond to the potential fraudster until you have investigated further. It is important not to tip them off.
Ensure thorough records are kept of any investigation. This is important if the fraudster is to be convicted for their crime. Ensure you have documented investigation and evidence collection and storage framework and procedures to follow if required.
Even if you are unsure if something is unusual, report it authorities and contact Netwealth. It is better to be cautious and escalate a concern. Netwealth will conduct a thorough investigation and may engage with you to seek further information about your concerns. You can contact Netwealth via our publicly listed number 1800 888 223 or via Chat.
Additional fraud and scam resources
For more information about fraud and scam prevention and reporting, see the below links.
Australian Competition and Consumer Commission (Scamwatch) - https://www.scamwatch.gov.au/
Australian Cyber Security Centre - https://www.cyber.gov.au/
Commonwealth Fraud Prevention Centre - https://www.counterfraud.gov.au/
National Anti-Scam Centre - https://www.nasc.gov.au/