Protecting yourself from investment scams
Australians lose more money to investment scams than any other type of scam per year (Source: Scamwatch website). Investment scams normally appear out of the blue and promise very high returns with little to no risk. In this case the old saying is correct – if it sounds too good to be true, it probably is.
Why do Australians over 65 need to be more scam savvy?
Everyone is susceptible to falling for a scam but Scamwatch statistics indicate that Australians aged 65 years and over account for 30% of the more than $135 million lost to scammers in 2023 (Source: Scamwatch website).
What is an investment scam?
Investment scams usually promise large payouts and high returns with very little risk involved. They appear out of the blue and normally sound too good to be true.
Common types of investment scams include:
Cryptocurrency scams
Unsolicited callers with investment opportunities
Romance baiting
Celebrity endorsement scams
Ponzi schemes
Superannuation scams.
In all investment scams, the money you invest doesn’t go towards any real investment, it goes straight into a scammer’s bank account. It can be difficult to differentiate between what is a scam and what is the real deal. Always seek financial advice from a financial advisor who is registered with ASIC prior to investing in any new opportunity.
How to spot an investment scam
Investment scams promise large returns with little or no risk.
Being contacted out of the blue and offered financial advice by someone you don’t know.
Being contacted repeatedly for investment opportunities.
Being offered financial advice by someone who doesn’t have an Australian financial services (AFS) licence.
Use of high-pressure tactics encouraging you to act upon the opportunity fast.
Use of celebrity endorsements for investments.
You are asked to deposit funds into multiple different accounts.
Tips to protect yourself from investment scams
Don’t feel pressured into making a decision despite being given urgent deadlines.
Always do your research before investing money.
Do not engage with unsolicited callers offering financial advice.
Check if a financial advisor who is offering you financial advice is registered via the ASIC website.
Check ASIC’s list of companies you should not deal with (https://moneysmart.gov.au/companies-you-should-not-deal-with).
Even if the company is not on ASIC’s list, be wary as it may still be a scam.
Remember the warning signs that can help you spot an investment scam.
If you ever believe you are being scammed, hang up the phone immediately and/or delete the email.
Do not engage in any conversation.
Do not hit reply or forward an email.
Never click on links.
Do not provide any personal information – even if the caller already knows your name and other information about you. Hang up and call the company they’re from on a number you trust.
Do not allow anyone to access your computer remotely.
Never download software sent to you by someone you haven’t verified as being genuine.
What you should do is report all attempted scams relating to financial services to ASIC.
Stay informed about what’s happening. Make regular visits to these website to see what scams are doing the rounds.
Source
Invest/ment scams. Scamwatch.gov.au. Data relates to losses to 30 June 2024.