Rural crime investigators have launched Strike Force Woden in response to reports of fraud targeting drought affected farmers on the Mid North Coast.
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Police have received numerous reports of a person advertising hay bales on social media for a discounted price.
In each case, the seller has taken an initial deposit for the fodder but has failed to delivery any product.
As a result, a number of people already under financial pressure due to the drought have lost money.
In addition to the Mid North Coast, police have received reports from the Hunter Valley, Southern Highlands, the Hills and the Oxley, Nepean and Port Stephens areas.
State rural crime coordinator Detective Inspector Cameron Whiteside urged farmers and landholders to take extra care when purchasing fodder, water and other supplies.
"These are difficult times, and it's disgusting to think anyone would seek to take advantage of people who have already been through so much," Det Insp Whiteside said.
"I would encourage anyone buying supplies online to only deal with people and businesses that have proven to be genuine in the past.
"Where possible, it is best to only hand over money until the goods are in your possession.
"And of course, the age old saying applies - if it sounds too good to be true, it usually is."
NSW Police and Emergency Services Minister David Elliott said anyone who takes advantage of drought affected farmers should face the full force of the law.
"At a time when we're seeing unprecedented levels of drought affecting every corner of NSW, it's unthinkable that anyone would seek to exploit those who most need our support," Mr Elliott said.
"This is a pathetic act and the government will continue to back our police in their efforts to keep these online criminals away from communities struggling during these hard times."
Anyone who thinks they may have fallen victim to the scam is urged to report it via Crime Stoppers on 1800 333 000.
"It is important not to be embarrassed - scams succeed because they look like the real thing and catch people off guard," Det Insp Whiteside said.
"Our officers need as much information as possible in order to investigate these crimes thoroughly and find those responsible."