An investment scam often presents as a “high return/low risk” opportunity and begins with an unsolicited call or email from someone claiming to be a financial adviser or investment broker. These investment opportunities may include:
- Cryptocurrency opportunities – often via encrypted messaging services and other non-traditional channels, such as social media
- Unsolicited investment offers – often claiming to be from reputable businesses.
- Celebrity endorsement – usually a fake endorsement of an investment or other business opportunity.
- Ponzi schemes – often through social media and asking victims to download apps, promising fast returns.
- Romance baiting – involving scammers meeting people on dating apps, developing a relationship, then introducing them to investment opportunities.
- Superannuation – scammers will offer early access to your super – for a fee.
- Comparison sites – to enable fake transactions for goods and financial products.
- Bonds – involving scammers demonstrating specialised financial knowledge, providing convincing documents and fake websites selling Treasury bonds and Green bonds.
Investment scams can be hard to spot as they often have well presented websites, professional looking reports and the scammers often sound legitimate and knowledgeable with statistics and projections. They may also use celebrity endorsements and client testimonials to build trust. The promises may sound too good to be true, and it’s likely that they are.
Investment scams are one of the most frequent type of fraud reported to the Australian Consumer Complaints Commission’s Scamwatch, for more information visit Scamwatch.
Warning signs and what to look for
- Promise of no or low risk, but high returns
- You’re asked to transfer funds quickly and directly to an institution
- High-pressure sales tactics, including from someone purporting to be from a verified institution
- Unexpected contact, unsolicited ‘cold’ call by a person or organisation you’ve never dealt with
- Requests for funds to be sent to a cryptocurrency exchange, or a request to create a cryptocurrency account for non-cryptocurrency assets
- Celebrity endorsements of an investment opportunity
- Invitation to deposit into multiple accounts
- No Australian Financial Services Licence (AFSL) or Australian Business Number (ABN), or claims they’re not needed
- Investment prospectus not registered with the Australian Securities and Investment Commission (ASIC)
- Links in emails or text messages sending you to logins or requesting personal details
- Requests for remote access to your computer to set up accounts and make transactions.
How to protect yourself
- Ask questions and request information
- Do your own independent research on the company. This research can include checking ASIC’s Moneysmart Investor Alert List
- Check for a AFSL licence on the Australian Securities and Investment Commission’s database of AFSL licencees
- Find the company’s website or phone number and confirm with them directly if the opportunity is legitimate. Do not use the information you’ve been given, find and verify it independently.
- Seek professional advice from a registered financial adviser
- Don’t follow any scripts or instructions on what to tell your bank, friends or family.
What to do if you have been scammed
If you suspect or have been targeted by an investment scam:
