ASIC has seen a “20%” rise in the reporting of the number of scams since the commencement of Covid19.

In Western Australian alone, individuals have lost nearly $5 million to investment scams this financial year.

According to WA’s Consumer Protection’s ScamNet, these scams saw victims responding to cold callers, emails and “enticing” advertisements on social media where false claims of low risk and high returns were made. Bogus investments on offer included shares, foreign exchange, binary options, cryptocurrencies and even puppies.

Some of the scams even used stolen images of celebrities and prominent business people to give the impression of authenticity, while some victims were presented with “investment opportunities” after the establishment of an online relationship through dating websites and apps. Others have used ATO, ASIC, major Bank’s Logos and letterheads.

In WA individual scams cost on average $77,000 each. Whether its an emotional or financial scam it can really be hard to accept. No one likes losing money or being taken for a ride especially with their emotions.

The saying goes “If it is too good to be true then it probably is”. This situation is most likely a scam when it is accompanied by a “keen” salesperson who gives you limited time to decide. This is true even if they have brilliant websites and testimonies from celebrities who you may trust. It is not until the investor asks to withdraw money that there is any indication that it’s a scam and a variety of excuses are used as to why withdrawals can’t be made. Even if the withdrawal is allowed it could build trust so in more money can be invested.

Investment promotion in Australia is a strictly regulated activity, so investors should only deal with companies and agents that are registered with ASIC”. Anyone who is looking to make an investment needs to stay alert as sometimes the identities of legitimate traders are stolen along with their ABN and registration details.”

Here are ScamNet’s top 8 tips to avoid being caught up in an investment scam:

  1. Don’t respond to emails and phone calls from strangers offering predictions on shares, investment tips or investment advice.
  2. Always be suspicious of offers to sell you, or your, shares, cryptocurrency etc. 

Be even more cautious where the so-called “company” is based overseas.

  1. Do your own research before you invest.

Don’t invest what you cannot afford to lose.

  1. If someone is telling you about a way to make fast and easy money, ask yourself: “Is this too good to be true?”

It’s highly likely you are receiving significant pressure about the investment and are also being promised high returns.

If this ever happens to you, discuss the matter with someone you trust or just “walk away”.

  1. Research thoroughly

WA ScamNet has recommended both carrying out your own research before investing money and getting independent financial advice from a licensed financial adviser.

  1. Check out moneysmart’s list of companies you should not deal with

If a company is on the list, do not deal with them. They are unlicensed and have been known to make unsolicited calls and emails about financial services or products.

  1. Do not rush into the “Opportunity”

Take your time to consider consult and research. If you miss the “opportunity” even if genuine you are no worse off than you were before. If you get caught, you certainly will be.

  1. If someone is paying you undue attention do not be fooled, chances are your attraction has not changed overnight. This is especially so if the someone is a stranger.

It may only be a matter of time before the request is made.

We are happy to discuss any “opportunity” you have to help you determine if it’s maybe right for you.

Stay Safe with Peace of Mind

John Jones