Invest
How bank bashing benefits financial criminals
Mistrust in the major financial institutions could make investors vulnerable to even greater scams.
How bank bashing benefits financial criminals
Mistrust in the major financial institutions could make investors vulnerable to even greater scams.
During the Christmas break, I got stuck into a podcast produced by The Australian called “Who the Hell is Hamish?” You may have heard of it. If you haven’t, here’s a quick recap (note: spoiler alert).
The seven-part series chronicles the life and crimes of serial Sydney-based conman Hamish McLaren, also known as Hamish Watson, who managed to swindle more than $7 million from wealthy investors across Australia, Hong Kong, the United States and the UK over a number of years. One of his victims was Aussie fashion designer Lisa Ho.
Posing as a successful futures trader, former Goldman Sachs employee and wealthy investor, the conman was able to gain the trust of his victims and convince them that he would invest their money and deliver stellar returns. Which he did – for a while – using a Ponzi scheme method. But eventually he left his victims penniless.
He was eventually captured by police and in June last year was jailed for up to 16 years. But the money he stole is long gone. No remediation programs being announced from this guy.
What struck me while listening to this story was how this man played on the anti-bank sentiment that has become so commonplace in Australia’s culture.
Throughout this series, we hear from victims who were told by the conman not to trust the banks, or that he “hates the banks”, playing on the resentments they may also have cultivated. He urges his victims not to let “those thieves” steal their savings. When in reality, that’s exactly what he planned to do himself.
There is no doubt that consumer trust in the Australian banking industry has been significantly eroded in recent years, culminating in the Hayne royal commission. This leaves vulnerable Australians in a very dangerous predicament, particularly as new operators look to fill the gap and win trust by offering an alternative to the big banks. Bank-bashing consumers hungry for yield are in the perfect position to be scooped up by scammers.
While there are plenty of credible new players in the market looking to challenge the major financial institutions by offering a better customer experience and superior returns, there are also criminals promising to do the same.
In this environment, it might be worth remembering that it is better to deal with the devil you know than the devil you don’t. For all their faults, the big banks are licensed, and there is recourse when things go wrong. Particularly in the aftermath of the royal commission and the formation of AFCA. In fact, there probably has never been a better time in history to be dealing with a bank if something goes wrong or you have a complaint.
Dealing with an unlicensed operator, however, means there is little that can be done when your life savings are stolen.
Over the years, I’ve seen a number of financial services professionals become victims of scam artists posing as referral partners and business associates but who were in fact unlicensed criminals. ASIC is of little help when it comes to these matters, as they can only go after those who are licensed.
When it comes to scammers, the police need to be involved, and that becomes a long and difficult process. Victims of financial crimes committed by unlicensed con-artists rarely recover their money.
Once you’ve handed it over, it’s as good as gone.
Beware: your hunger for investment returns, coupled with a mistrust of the banks, is the perfect attitude to drive you into the hands of unscrupulous scam artists.
RELATED ARTICLES
Investment insights
Australia’s 5% deposit reboot: who wins, who pays, and what changes from 1 October
By pulling forward and widening the 5% Home Guarantee Scheme, Canberra has reset the entry point to home ownership — and the chessboard for banks, brokers, developers and insurers. The higher price ...Read more
Investment insights
Australian investors undeterred amidst global uncertainty, prioritise financial security, tech stocks, and tangible goals
In a world marked by economic fluctuations and geopolitical uncertainties, Australian investors are showing resilience and confidence, according to a recent survey by wealth app SharesiesRead more
Investment insights
Escaping the dollar trap how treasuries and bullion are reshaping portfolios
Gold’s geopolitical premium has broken out of the margins and into the mainstream of reserve and portfolio strategy. Central banks have been net buyers for years and, since 2022, their accumulation ...Read more
Investment insights
From check-up to edge: a portfolio review case study that turned volatility into advantage
With rates rising more than 400 basis points in 18 months and asset correlations behaving badly, periodic portfolio reviews have moved from hygiene to edge. This case study shows how a disciplined ...Read more
Investment insights
Policy risk meets cost shock: Why investors are exiting housing — and what business can do about it
A sudden jump in holding costs and a rising ‘policy risk premium’ are pushing Australian property investors to sell, thinning rental supply and pushing rents higher. Industry surveys point to fear of ...Read more
Investment insights
Australia's investor shuffle as policy risks and rising yields squeeze the rental market
A quiet but consequential shift is underway: more property investors are exiting, citing higher holding costs and fear of future tax changes. That retreat risks worsening the rental shortfall just as ...Read more
Investment insights
State Street Markets report highlights resilient investor sentiment amid shifting allocations
In a climate of evolving global financial landscapes, State Street Markets has released its latest institutional investor indicators, revealing a sustained positive sentiment across the investment ...Read more
Investment insights
Consumer strength lifts Australia’s GDP — but the investment slump is the risk line every CFO should read
Australia’s June-quarter growth surprised to the upside as households and government spending outpaced a steep fall in public investment. The services economy is doing the heavy lifting, but the ...Read more
Investment insights
Australia’s 5% deposit reboot: who wins, who pays, and what changes from 1 October
By pulling forward and widening the 5% Home Guarantee Scheme, Canberra has reset the entry point to home ownership — and the chessboard for banks, brokers, developers and insurers. The higher price ...Read more
Investment insights
Australian investors undeterred amidst global uncertainty, prioritise financial security, tech stocks, and tangible goals
In a world marked by economic fluctuations and geopolitical uncertainties, Australian investors are showing resilience and confidence, according to a recent survey by wealth app SharesiesRead more
Investment insights
Escaping the dollar trap how treasuries and bullion are reshaping portfolios
Gold’s geopolitical premium has broken out of the margins and into the mainstream of reserve and portfolio strategy. Central banks have been net buyers for years and, since 2022, their accumulation ...Read more
Investment insights
From check-up to edge: a portfolio review case study that turned volatility into advantage
With rates rising more than 400 basis points in 18 months and asset correlations behaving badly, periodic portfolio reviews have moved from hygiene to edge. This case study shows how a disciplined ...Read more
Investment insights
Policy risk meets cost shock: Why investors are exiting housing — and what business can do about it
A sudden jump in holding costs and a rising ‘policy risk premium’ are pushing Australian property investors to sell, thinning rental supply and pushing rents higher. Industry surveys point to fear of ...Read more
Investment insights
Australia's investor shuffle as policy risks and rising yields squeeze the rental market
A quiet but consequential shift is underway: more property investors are exiting, citing higher holding costs and fear of future tax changes. That retreat risks worsening the rental shortfall just as ...Read more
Investment insights
State Street Markets report highlights resilient investor sentiment amid shifting allocations
In a climate of evolving global financial landscapes, State Street Markets has released its latest institutional investor indicators, revealing a sustained positive sentiment across the investment ...Read more
Investment insights
Consumer strength lifts Australia’s GDP — but the investment slump is the risk line every CFO should read
Australia’s June-quarter growth surprised to the upside as households and government spending outpaced a steep fall in public investment. The services economy is doing the heavy lifting, but the ...Read more
