Fraud, Scams & Online safety
May 14, 2024
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Is it really a once-in-a-lifetime opportunity?

Is it really a once-in-a-lifetime opportunity?

You may have received a phone call or text message in the past offering a once-in-a-lifetime opportunity that can change your life. Offering a chance that you may never get […]

You may have received a phone call or text message in the past offering a once-in-a-lifetime opportunity that can change your life. Offering a chance that you may never get again by impersonating as a stockbroker or a portfolio manager to an investment professional with no risk to your finances and immediate returns.

How can Investment Scams look like?

Investment fraud occurs when individuals attempt to deceive you into investing money. They may encourage you to invest in various financial instruments such as stocks, bonds, commodities, currency, or real estate. Scammers may provide false information or misrepresent legitimate investment opportunities to manipulate you into making investments based on deceit.

The majority of losses to investment scams involved crypto investments, with $113 million reported lost this year. Cryptocurrency is also the most common payment method for investment scams. They may even offer an early access to your super – for a fee.

Here is how you can detect these scams as preventative measures

Promises of High Returns with Low Risk:

Be wary of investment opportunities that promise high returns with little or no risk. All investments carry some level of risk, and legitimate investments typically offer returns that are commensurate with the level of risk involved.

Pressure to Act Quickly:

Scammers often use high-pressure tactics to push investors into making decisions quickly without sufficient time to conduct research or seek advice. Be cautious of any investment opportunity that requires immediate action or creates a sense of urgency. Contact the bank itself to check whether the account is legitimate before you transfer anything. If you need help, phone the Australian Cyber Security Hotline on 1300 292 371 (open 24 hours, 7 days a week) for expert cyber security advice, assurance and assistance. 

Unsolicited Contact:

Be cautious of unsolicited emails, phone calls, or social media messages promoting investment opportunities. Legitimate investment opportunities are typically researched and sought out by investors rather than being pushed onto them. It is common for investment scams to be promoted on social media such as through Facebook Ads. You can report it if you do see one that looks suspicious through their ad settings function. Just because 'the firm' has a website or even news articles to back it up, it can still not be true.

Lack of Documentation or Transparency:

Legitimate investments provide detailed documentation, such as prospectuses, offering memoranda, or financial statements, that outline the investment opportunity, associated risks, and terms and conditions. Be suspicious of any investment that lacks transparency or refuses to provide documentation even if they provide an ABN.

Guaranteed Returns or No Risk:

Investments that guarantee returns or claim to have no risk are often red flags for scams. All investments carry some degree of risk, and no legitimate investment can guarantee returns.

Complex or Confusing Strategies:

Be cautious of investment opportunities that use complex or confusing strategies that are difficult to understand. Scammers may use technical jargon or sophisticated-sounding investment strategies to confuse investors and conceal their fraudulent activities.

Unregistered or Unlicensed Sellers:

Before investing, verify that the individual or firm offering the investment is registered or licensed with the appropriate regulatory authorities. Unauthorised or unregistered sellers may be operating illegally or engaging in fraudulent activities.

Unrealistic Promises or Overly Complicated Structures:

Trust your instincts and be skeptical of any investment opportunity that seems too good to be true or overly complicated. If something doesn't feel right or you don't fully understand the investment, it's best to walk away.

Lack of Independent Verification:

Independently verify the legitimacy of the investment opportunity by conducting research, checking references, and seeking advice from trusted financial professionals or regulatory authorities.

If they say they are:Check this:
Licensed by ASIC (AFS licence)ASIC Connect Professional registers
- Enter name or licence number
- Select Register: Australian financial services licensee in drop-down menu
ASIC Connect
- Search in: Banned and Disqualified
- See if they have been banned from giving financial advice or managing a company
An authorised representative for a licensee (with an AFS licence)ASIC Connect Professional registers
- Enter name or licence number
- Select Register: Australian Financial Services Authorised Representative in drop-down menu
financial adviser who can advise you on, or sell you, this investmentFinancial Advisers Register
- Enter name, adviser number, or Australian Business Number
- Check what they are authorised to advise on
Offering an investment in a registeredmanaged investment schemeASIC Connect
- Search in: Organisation and Business Names
- Look for Australian Registered Scheme Number (ARSN)
Source: Money Smart

By remaining vigilant and conducting thorough research before investing, you can reduce the risk of falling victim to investment scams and protect your hard-earned money. Once an individual does transfer money especially to an account outside Australia, there is very little authorities or banks can do to retrieve or track the money sent. Report it to ScamWatch and your bank immediately if you see any unauthorised transactions. Contact IDCARE on 1800 595 160. IDCARE is a free, government-funded service that provides support to victims of identity crime.

Get Police Assistance

For all emergencies and immediate Police assistance
Call: 000
To report non-urgent crimes or events 24 hours a day
Call: 131 444
To report information about a crime contact Crime Stoppers on
1800 333 000

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