Australians’ losses from investment scams exceed $229m in 2015

Australians’ losses from investment scams exceed $229m in 2015

- in All News, Regulation, Warnings
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Losses from investment scams in Australia doubled to $229 million in 2015, the Australian Securities and Investments Commission (ASIC) said on Monday, citing data from the Australian Competition and Consumer Commission’s (ACCC) Targeting Scams Report. Meanwhile, reports to the Australian Cybercrime Online Reporting Network (ACORN) revealed losses of over $127 million in 2015, from 25,600 complaints.

“If you add Scamwatch and ACORN data with losses detected through scam disruption work, total scam losses exceeded $229 million last year. We know that in reality the actual total is higher still as many people never report that they’ve been scammed,” ACCC Deputy Chair Delia Rickard said.

“ASIC received 367 reports about scams in 2015, although in our experience scams are often under reported.  The number of Australians contacted by scammers, and the amounts of money lost, are likely to be much larger than what is reported to us,” ASIC deputy chairman Peter Kell said.

There were finve main types of investment scams reported to the ASIC. Here they are:

  • overseas cold calling about investment opportunities;
  • overseas calls offering easy credit or loans after payment of an upfront fee;
  • sports arbitrage or gambling schemes;
  • money transfer schemes (job opportunity or other fraud);
  • fake debt and invoice scams.

“Overseas based scammers in particular commonly target consumers in wealthier countries such as Australia. People over 55, many of whom are looking for investment returns in a low interest rate environment, are often most at risk,” Kell said. “”In many cases the pitch to consumers is so professional, slick and believable that it is hard to tell these are not genuine financial opportunities. Scammers have sophisticated sales practices that include call scripts, false paperwork, fake websites and made-up referees,” he added.

Investors should be wary and not engage with potential fraudsters. The regulator also reminded that investors can and should always report any entities and individuals they consider could be a scam. Moreover, investors should not trust their funds with overseas

Here are some tips on how investors can protect themselves against investment scams, as provided by the ASIC:

  • Always taking time to consider investment opportunities;
  • Checking ASIC’s MoneySmart website for the list of companies you should not deal with. If the company that called you is on the list – do not deal with them;
  • Checking the company’s listing on the stock exchange for its current value and recent share performance as some offers to buy shares may be well below market value;
  • Checking the company is real by calling their publicly listed phone number;
  • Getting a second opinion from a licensed financial adviser; ASIC Australia scam losses 2015

In Australia, financial investment companies, including forex brokers, are forbidden to operate without a local license. Investors who engage with unregulated brokers put their funds at risk. The regulator maintains a register with all authorized entities and regularly issues warnings against unauthorized entities.

We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like ASIC, CySec, FCA, and CFTC/NFA, among others.

Source: ASIC

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