Australians lost more than $41 million to investment scams in 2015 according to new data collated by the Australian Competition and Consumer Commission and the Australian Cybercrime Online Reporting Network. This is concerning as total losses are likely to be much higher as many people don’t report scams.
The breakdown of the losses reported to the ACCC ($24.5 m) shows investment scams are taking a heavy toll on older Australians with people over 55 losing around $6 million. This accounts for a quarter of all losses to investment scams reported to Scamwatch and more than 40 per cent of losses when you consider only those reports where age was provided.
Australians are a prime target for investment scams because our nation is relatively wealthy. Low interest rates could also be a factor in explaining the increase in money lost to investment scams. With low interest rates, some people may be exploring ways to grow their retirement funds, which could make them susceptible to fraud.
Investment scams come in many guises including business ventures, superannuation schemes, managed funds and the sale or purchase of shares or property.
Out of the blue into the red
Investment scams often start with a cold-call from someone claiming to be a stock broker or portfolio manager offering an investment opportunity.
The caller will claim what they are offering is low-risk and will provide you with higher than average returns, generally encouraging you to invest in overseas companies.
The scammer’s offer will sound legitimate and will often be dressed up with professional looking brochures and slick websites.
In other scenarios, you may receive an email from a stranger offering advice on the share price of a particular company.
The email may not be addressed to you personally, and may even give the impression it was sent to you by mistake.
Either way there is always an underlying sense of urgency, the email will say act now or miss out.
Tips to avoid investment scams
Delia Rickard is Deputy Chair of the Australian Competition and Consumer Commission.