Back

Wise up to Investment Scams

Delia Rickard
7th June, 2016

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

  • Don’t let anyone pressure you into making decisions about your money or investments
  • Check ASIC’s MoneySmart website for the list of companies you should not deal with. If the company that called you is on the list – don’t deal with them, and just because they’re not on the list doesn’t mean they’re legitimate.
  • Do your own research on investment opportunities and check if an investment adviser is licensed via ASIC’s MoneySmart website www.moneysmart.gov.au
  • Don’t send your money overseas for an investment offer that has come out of the blue – no matter how attractive or professional it appears.

Delia Rickard is Deputy Chair of the Australian Competition and Consumer Commission.

CHECK OUT MORE HELPFUL ARTICLES

VIEW ALL ARTICLES

Managed funds - are they right for you?

Managed funds can make it easy for you to invest. However, there are thousands of managed funds on offer, so choosing the right one for you can sometimes be confusing.
Read More

You Could be Entitled to a Share in $1.2 Billion of Unclaimed Money

There are around 1.3 million records of unclaimed money from dormant bank accounts, life insurance...
Read More

Managing Investment Risk

Volatility in global markets can affect investor and consumer confidence.
Read More
lamp

LOOKING FOR FINANCIAL ADVICE?

Find a financial adviser who will act in your best interests.

FIND A FINANCIAL ADVISER

SIGN UP FOR OUR MONTHLY NEWSLETTER

Want to stay up to date with personal financial issues affecting ADF members and their families? Sign up for our monthly e-newsletter with topical articles by a range of expert contributors.

2LT
AB
AC/W
ACM
ADM
AIRCDRE
AIRMSHL
ASLT
AVM
BRIG
CAPT
CDRE
CMDR
COL
CPL
CPL/BDR
CPO
DR
FLGOFF
FLTLT
FSGT
GEN
GPCAPT
LAC/W
LCDR
LCPL/LBDR
LEUT
LS
LT
LTCOL
LTGEN
MAJ
MAJGEN
MIDN
MR
MRS
MS
NCOCDT
OCDT
OFFCDT
PLTOFF
PO
PTE
RADM
RSM-A
SBLT
SQNLDR
SSGT
VADM
WGCDR
WO
WO-N
WO1
WO2
WOFF
WOFF-AF
Other

NEED HELP?

WE ARE HERE TO ASSIST

GET IN TOUCH