Don’t be fooled by Investment Scams

According to the Australian Competition and Consumer Commission (ACCC), Australians lost over $328 million from investment scams in 2020. This made up more than a third of total losses from scams, however, these numbers could be significantly higher as many cases go unreported. The following information may assist you in identifying the signs of an investment scam.

What are investment scams?

Investment scams can occur when someone contacts you unexpectedly either by phone, email or social media offering you financial advice and a once in a lifetime opportunity to invest.

Cold call – A scammer claiming to be a stock broker or portfolio manager calls you offering financial or investment advice. The scammer may sound legitimate and create a sense of urgency, prompting you to make a quick decision.

Social media – Scammers may use social media to message you, advertise or send ‘friend’ requests. Often they may pose as someone you know or are connected to. If you friend them, they may send you offers to invest and make quick money.

Advertisements – Investment fraud scammers often appear as ‘pop ups’ on the internet appearing as a legitimate website, some of which are endorsed by public figures. Scammers can also issue fake online press releases for outstanding corporate performance. They have the ability to provide logins to view fake investment balances and offers of high return with little or no risk.

Warning signs

• The scammer sounds legitimate and knowledgeable providing all the facts and figures on an investment that seems too good to miss.
• The investment offer doesn’t have an Australian financial services (AFS) licence or claims they don’t need one.
• You see an advertisement via digital channels promising a quick and easy way to make money that promotes a ‘risk-free investment.’
• Quick and high returns or tax free benefits.
• Share or virtual currency investments promising ‘high return’ schemes.
• Investment opportunities with inside information for early bird investors.
• Receiving instructions to open a cryptocurrency account, this is sure to be a scam.

Protect yourself

• Don’t let anyone pressure you when making investment decisions.
• Always seek independent legal or financial advice.
• Do your own research and check if the company is registered with ASIC.
• Check ASIC’s list of companies you shouldn’t deal with.

People from all walks of life can become victims if the timing is right and the story is convincing. It is important to become educated, do some research if unsure and look out for anything that may look suspicious.

Have you been scammed?

If you or someone you know think you might have been scammed, contact your financial institution immediately. We also encourage you to report scams to the ACCC via the Report a scam page.