Aussies are losing close to $4.3m a month to investment scams, according to the ACCC with the majority of these scams focus on traditional investment like stocks, real estate or commodities.
This year, more than $26m has been reported lost to investment scams—already 84 per cent of the total losses recorded in 2017. This represents an average month on month increase in losses of 117 per cent compared to last year.
For example, a scammer will cold call a victim, claim they are a stock broker giving a hot tip or inside information about a stock or asset that is about to go up in value.
They will claim what they are offering is low-risk and will provide quick and high returns.
Delia Rickard, deputy chair at the ACCC says, “The losses to investment scams are horrific. Each week the ACCC receives heartbreaking accounts of people losing hundreds of thousands, and in some cases millions, of dollars.
“Last year, Australians reported they lost $64.6 million to investment scams to Scamwatch and the Australian Cybercrime Online Reporting Network (ACORN). If the current trend continues, combined losses reported to Scamwatch and ACORN in 2018 could be in excess of $100 million.
“These scams are very sophisticated and the scammers are very convincing. People aged 45–64 are most at risk and make up more than half the reports sent to Scamwatch.”
Cryptocurrency based trading scams have become more prevalent in the past 12 months becoming the second most common investment scam.
Rickard says, “The rise in popularity in cryptocurrency trading has not been missed by scammers who are latching onto this new trend to con people. These are similar to any other investment scam: the scammer will claim to have inside knowledge about price movements they will use to make you a fortune. If you invest, your money will quickly disappear.”
The ACCC says the clearest warning sign you’re dealing an investment scammer is how they contact you and the promises they make.
Rickard adds, “It can be very difficult to tell what is and isn’t legitimate these days. If someone calls, emails or texts you out of the blue with investment advice, don’t engage with them no matter how legitimate they sound. Hang up the phone, or delete the email or text. If you’re searching for new investment opportunities online, don’t always trust what you read. It’s easy for scammers to create professional looking investment websites.
“Any claims like ‘risk-free investment’, ‘low risk, high return’, ‘be a millionaire in three years’, or ‘get-rich quick’ are also easy tells that you’re dealing with a scammer.”
