With the cost of living going up, interest rates on the rise, and not to mention the price of housing, making some easy money on a guaranteed return is more appealing than ever.
However, as the saying goes, if something seems too good to be true – it probably is. If you are being offered a low risk, high return investment, proceed with caution.
Over the past few weeks, we have been contacted by a number of clients who have been targeted by some very sophisticated investment scams. With slick websites, convincing sales material and professional customer service, it is easy to believe that you are being contacted by a legitimate, genuine and trustworthy company.
It can be tough to spot a scam, and it seems no one is off-limits. Investment scams succeed because they look or sound like the real thing. Scammers will look at the latest investment trends for opportunities. They use familiar company names, platforms, and terms to persuade investors and appear credible.
Scam Warning Signs
- Receiving cold calls from a portfolio manager, stockbroker or even a potential love interest offering unsolicited advice on investments.
- The promise of low risks and high returns, tax-free benefits or ‘guaranteed returns’.
- Promoting (fake) Green Bonds.
- Encouraging investment in shares, cryptocurrency, mortgage, real estate or virtual investments, all with ‘high returns’.
- High-pressure tactics – act now or miss out!
- Refunds for non-performance or insured transactions.
- The use of celebrity endorsements.
- Discounts for early bird investors,
- No Australian Financial Services (AFS) licence or saying they don’t need one.
How to know if an investment opportunity is real?
Even if you think you are investing in a well-known company, it pays to do your research.
To check the legitimacy of an investment offer, start by asking your contact:
- What is your name?
- What company do you represent?
- Who owns your company?
- Does your company have an AFS licence, and what is the licence number?
- What is your address?
- Is your investing prospectus registered with ASIC?
If they are unable to or avoid answering these questions, it’s highly likely the investment offer is a scam. Hang up the phone or delete the email. Stop dealing with the person or block and delete them if they contacted you through social media.
Even if they can answer all the questions, it’s still important to verify what they tell you to make sure the investment opportunity is real.
ASICS’s MoneySmart.Gov.au suggests you undertake the following checks before investing any money:
- ASIC’s Offer Notice Board – See if the company has lodged disclosure documents with ASIC.
- Publicly listed phone directories – Check whether the address and contact details are correct.
- ASIC Connect’s professional registers – Check whether the company has an AFS licence or an Australian credit licence. Also, check that the number given matches what is on ASIC’s registers.
- ASIC’s list of companies you should not deal with – Make sure the company name is not on the warning list.
- International Organization of Securities Commission’s (IOSCO) investor alerts – Make sure the company is not named.
- ASIC’S list of fake regulators and exchanges – Check if the investment offer mentions an entity on this list.
Investing is a decision that should never be taken lightly. You shouldn’t feel pressured into making decisions about your investments, including your superannuation. Take the time to do your research and always get independent financial advice before investing any money. Should you have questions regarding material you may have sent, please get in touch with the office on (02) 4365 6789
Think you have been scammed?
- Immediately stop sending money to the company.
- Report it to your bank or financial institution.
- Be wary of offers to recover your money; it could be a follow-up scam.
- Report it to ASIC or report it to your local police.
- Get support if you need it from Lifeline (13 11 14) or the National Debt Helpline (1800 007 007).