Australians are set to lose a record amount to scams in 2019,
with projections from losses reported to Scamwatch and other government
agencies so far expected to exceed $532 million by the end of the year,
surpassing half a billion dollars for the first time. “Many people are
confident they would never fall for a scam but often it’s this sense of
confidence that scammers target,” ACCC Deputy Chair Delia Rickard said. “People
need to update their idea of what a scam is so that we are less vulnerable.
Scammers are professional businesses dedicated to ripping us off. They have
call centres with convincing scripts, staff training programs, and corporate
performance indicators their ‘employees’ need to meet.”
Investment scams are one of the most sophisticated and
convincing scams and continue to have the highest losses. Nearly half of all
investment scams reported this year resulted in a financial loss. These scams
are prominent on social media, with ‘Facebook lottery’ scams, the ‘Loom’
pyramid scheme, and cryptocurrency scams particularly common.
Cryptocurrency investment scams have seen record losses, with
reports to the ACCC alone of $14.76 million between January and July 2019. Many
use social media platforms, fake celebrity endorsements or fake online trading platforms
that are made to look legitimate.
Common types of
investment scams
Investment cold calls:
A scammer claiming to be a stock broker or portfolio
manager calls you and offers financial or investments advice. They will
claim what they are offering is low-risk and will provide you with quick and
high returns, or encourage you to invest in overseas companies. The
scammer’s offer will sound legitimate and they may have resources to back
up their claims. They will be persistent, and may keep calling you back.
The scammer may claim that they do not need an Australian Financial Services
licence, or that that they are approved by a real government regulator or
affiliated with a genuine company.
The investments offered in these type of cold calls are usually
share, mortgage, or real estate high-return schemes, options trading or foreign
currency trading. The scammer is operating from overseas, and will not have an
Australian Financial Services licence.
Share promotions and hot tips:
The scammer encourages you to buy shares in a company that they
predict is about to increase in value. You may be contacted by email or the
message will be posted in a forum. The message will seem like an inside tip and
stress that you need to act quickly. The scammer is trying to boost the price
of stock so they can sell shares they have already bought, and make a huge
profit. The share value will then go down dramatically.
If you invest you will be left with large losses or shares that
are virtually worthless.
Investment seminars:
Investment seminars are promoted by promising motivational
speakers, investment experts, or self-made millionaires who will give you
expert advice on investing. They are designed to convince you into
following high risk investment strategies such as borrowing large sums of money
to buy property, or investments that involve lending money on a no
security basis or other risky terms.
Promoters make money by charging you an attendance fee, selling
overpriced reports or books, and by selling investments and property without
letting you get independent advice. The investments on offer are
generally overvalued and you may end up having to pay fees and commissions that
the promoters did not tell you about. High pressure sales tactics or false and
misleading claims are often used to pressure you into investing, such as
guaranteed rent or discounts for buying off the plan. If you invest there is a
high chance you will lose money.
Visit ASIC’s MoneySmart for more information about investment
seminar scams.
What can you do:
Protect
yourself:
- Do not give your details to an unsolicited caller or reply to emails offering
financial advice or investment opportunities – just hang up or delete the
email.
- Be suspicious of
investment opportunities that promise a high return with little or no risk.
- Check if a financial
advisor is registered via the ASIC website. Any business or person that offers
or advises you about financial products must be an Australian Financial
Services (AFS) licence holder.
- Check ASIC’s list
of companies you should not deal with. If the company that called you is on the list – do not deal
with them.
- Do not let anyone
pressure you into making decisions about your money or investments and never
commit to any investment at a seminar – always get independent legal or
financial advice.
- Do not respond to emails
from strangers offering predictions on shares, investment tips, or investment
advice.
- If you feel an offer to
buy shares might be legitimate, always check the company’s listing on the stock
exchange for its current value and recent shares performance. Some offers to
buy your shares may be well below market value.
- Never commit
to any investment at a seminar – always take time to consider the opportunity
and seek independent financial advice.
- If you are under 55, watch out for offers promoting easy
access to your preserved superannuation benefits. If you illegally
access your super early, you may face penalties under taxation law.
Have you been scammed?
If you think you have provided your account details to a
scammer, contact your bank or financial institution immediately. We encourage
you to report scams to the ACCC via the report
a scam page. This helps us to warn people about
current scams, monitor trends and disrupt scams where possible. Please include
details of the scam contact you received, for example, email or screenshot.
Scams that relate to financial services can also be reported
to ASIC.
We also provide guidance on protecting
yourself from scams and where
to get help.
