How to stop investment scams

INVESTMENT scammers are stealing Australians’ money at double the rate of just a year ago, prompting fresh warnings for people to be cautious.

New figures from the Australian Competition and Consumer Commission show that more than $26 million had been reported lost to investment scams in the first six months of 2018 – with monthly losses up an average 117 per cent since last year.

The ACCC says the majority of scams centre on traditional investments such as stocks, real estate and commodities, but cryptocurrency scams are now the second most common type.

“Scammers will spend significant time and effort grooming their victims to invest,” said ACCC deputy chair Delia Rickard.

“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,” she said.

Scammers often cold call victims, claiming to be a stockbroker or investment manager with a “hot tip” that is low risk and will deliver high returns. If it sounds too good to be true, it usually is.

Laura Higgins, senior executive leader at ASIC’s MoneySmart, said before signing up to any investment people should make sure it is genuine.

“If someone is asking about your financial situation and encouraging you to do something right that very second, your best course of action is to hang up the phone.

“If they have reached out via email, don’t reply or open any links,” she said.

People should be wary of unexpected contact and check an investment promoter has an Australian Financial Services licence and is not on ASIC’s register of companies to avoid.

“Often there’s little authorities can do to reunite people with lost money. We encourage people to report scams to ASIC to prevent other people from falling into these traps,” Ms Higgins said.