The Australian Competition and Consumer Commission (ACCC) revealed this week that Australians are losing $4.3 million a month to sophisticated scams, with scammers taking advantage of investment trends like cryptocurrency to groom and devastate victims. That's a 117 per cent month-on-month increase compared with last year.
With $26.4 million already lost in 2018, scammers are only 14 per cent behind last year's total of $31.3 million as of the end of June.
“The losses to investment scams are horrific. Each week the ACCC receives heartbreaking accounts of people losing hundreds of thousands, and in some cases millions, of dollars,” ACCC deputy chair Delia Rickard said.
"Last year, Australians reported they lost $64.6 million to investment scams to Scamwatch and the Australian Cybercrime Online Reporting Network (ACORN). If the current trend continues, combined losses reported to Scamwatch and ACORN in 2018 could be in excess of $100 million."
She said Australians between 45 and 64 are most at risk, making up more than half the reports.
Most investment scams are centred on traditional investments like stocks or real estate with scammers cold calling victims to offer a hot tip, while posing as a stock broker.
However, cryptocurrency trading and binary options are also fertile ground for scammers, with cryptocurrency scammers now the second-most common type.
“Scammers will spend significant time and effort grooming their victims to invest. They will use the right technical language and also offer professional looking websites and documents to convince victims they are legitimate. It’s often only when people try to cash out their investment that they realise their money is gone,” Ms Rickard warned.
“The rise in popularity in cryptocurrency trading has not been missed by scammers who are latching onto this new trend to con people.
“These are similar to any other investment scam: the scammer will claim to have inside knowledge about price movements they will use to make you a fortune. If you invest, your money will quickly disappear.”
She said investors should be alert to “advice” offered out of the blue and should hang up or delete the email or text.
Additionally, internet literacy is important.
“If you’re searching for new investment opportunities online, don’t always trust what you read. It’s easy for scammers to create professional looking investment websites,” Ms Rickard said.
“Any claims like 'risk-free investment', ‘low risk, high return’, 'be a millionaire in three years', or 'get-rich quick' are also easy tells that you’re dealing with a scammer.”