subscribe to our newsletter sign up

Investment scams hitting Aussies hardest

Investment scams

Investment scams have received the dubious honour of being the “most lucrative method of fraud”, and investors should be on high alert.

That’s according to the Australian Securities and Investments Commission (ASIC), which told investors on Monday to keep an eye out for the “slick” scams.

“Reports to ASIC about investment scams in 2017 show that $4.9 million was lost by investors, with an average loss of $82,973,” said ASIC deputy chair Peter Kell.

“Offshore cold-calling is the most common type of investment scam, where a compelling investment offer is delivered by someone who will then back up the pitch with a slick website, fake research and insistent follow-up calls.”

In one instance, criminals operating overseas stole $1.2 million from a complainant.

According to the Targeting Scams Report, $31.3 million was lost to investment scams last year, marking a 33 per cent increase on the 2016 figures.

Most of these scams offer investment opportunities or credit offers.

“In one case reported to ASIC, a retired widow invested $450,000 in overseas listed companies before a relative became aware of the story and alerted ASIC,” said Mr Kell.

“In another case, a woman lost her life savings after dealing with an offshore investment broker who was introduced by a close friend. The best defence against these scams is simply to hang up.”

What to do if you think it’s a scam

ASIC suggests those who think they’ve encountered a scam check the details of the suspicious entity by visiting ASIC’s MoneySmart website.

MoneySmart posts the details of dangerous overseas entities, fake exchanges and fake regulators.

In order to check the legitimacy, investors should visit ASIC’s Companies You Should Not Deal With list.

Investors can also cross-check the name, address and owner of the investment company, as well as the investment scheme on ASIC’s Professional Register.

Investment scams hitting Aussies hardest
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Anon - I believe you are all missing the point. In this example the member "who was wholly invested in cash and paying an adviser service fee every month",.......
Anonymous - Mr Hodge was giving general advice -- cash is bad in all situations is not personal. It is however wrong.....
Isla Nettlefold - Hi Dan, can you please tell me how FACTA might effect me, a 74 year old retired American widow living in Adelaide? I have some rental properties that.......
Adam Goldstien CFP - There are justifiable reasons why a 70 year-old member would choose or an adviser would advise - a client be invested in cash; imminent retirement,.......