NSW Fair Trading Assistant Commissioner Robert Vellar says there has been a spate of bogus calls, mainly during the day, to residents across NSW, Victoria, Queensland and Western Australia.
The callers claim to represent NSW Fair Trading and tell people they are entitled to money from banks.
They then ask for account details so the funds can be returned.
The scam is the latest in a conga-line of criminal hoaxes where people claimed to be from banks or government agencies, he says.
Because the transactions are done over the internet any money lost is almost irretrievable, Mr Vellar said.
"In all likelihood it is very difficult, and really almost impossible to recover people's money because it's gone offshore to Eastern Europe or to Africa," he told AAP on Tuesday.
"With the technology that the internet provides ... (the phone calls) are virtually untraceable.
"Calls are made to look like they come from Sydney but often they are calling from somewhere like the Ukraine."
The scams were almost impossible to police, he said.
According to the Australian Competition and Consumer Commission (ACCC), Scamwatch, more than 83,000 people reported scams in 2011, costing unsuspecting victims more than $85.6 million.
Almost 52 per cent of scams reported to the ACCC in 2011 were delivered by phone.