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Scammers cheating Aussies out of millions

Nick Bendel avatar
Nick Bendel
- 3 min read
Scammers cheating Aussies out of millions

Consumers have been warned about investment scams, with authorities explaining how they tend to originate and how they can be avoided.

Australians reported losing more than $13 million to investment scams during the first six months of 2017, according to the Australian Competition & Consumer Commission (ACCC).

People aged 45 to 64 most commonly fall victim to investment scams, while men are almost twice as likely as women to be targeted.

“They seem too good to be true because they are”

ACCC deputy chair Delia Rickard said that scams typically start with a phone call out of the blue, although they can also originate with unsolicited emails, online forums and social media.

The scams are run by “sophisticated, convincing and persistent” criminals, which is why so many of them succeed.

“Scammers use high-pressure tactics to sell you a financial opportunity that is ‘not to be missed’, involves high and quick returns for low risks, and needs to be acted on quickly or you will miss out,” she said.

“Whatever your motive is for the investments you make, do your research and never invest money with someone who has contacted you out of the blue, no matter who they say they are, how much money they promise you or the urgency with which they’re trying to make you act. They seem too good to be true because they are.”

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Common investment scams

Here, in the ACCC’s words, are three common investment scams:

  1. Unsolicited phone calls and emails offering investment opportunities with high returns. They can involve multiple calls, with multiple people who speak in investment jargon and provide you with access to professional-looking websites and documents. Your initial investment may seem to show promising results quickly but soon your money and the scammer disappear and you have lost everything.
  2. Unsolicited calls from scammers offering to roll your superannuation funds into a self-managed fund that will help you reduce your tax and provide great investment opportunities. In reality they are just stealing your superannuation funds.
  3. Binary options trading that involve predicting the movements of commodity, asset or index prices over a short time. If you agree, they direct you to a website with a login, account details and a trading platform. They appear to put your money into the account and demonstrate a number of successful trades to encourage you to invest greater sums. Then your money begins to disappear, and so too does the scammer.

Five ways to protect yourself

The ACCC has also offered this advice on how to protect yourself:

  1. Hang up or hit delete on all cold calls and emails offering unsolicited advice on investing.
  2. Visit ASIC’s MoneySmart website to check companies you shouldn’t deal with and ASIC’s professional registers to see if someone you are dealing with has an Australian Financial Services Licence.
  3. Block the scammer on your social media accounts so they can’t contact your family and friends.
  4. Conduct thorough research before making any investment.
  5. Never commit to any investment at a seminar – always get independent financial advice.

Disclaimer

This article is over two years old, last updated on July 24, 2017. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent investment funds articles.

This article was reviewed by Head of SEO Leigh Stark before it was published as part of RateCity's Fact Check process.

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