GAMES THEY PLAY
While investment scams can take many guises, here are a few that were used over the past year.
TRADING This highrisk form of trading bets on whether a stock or commodity price will go up or down. If you (or the trading signals software most real brokers use) predict correctly, you profit. If you’re wrong, you’ll lose your entire outlay. While it’s legal in AU and NZ, many reputable investors steer away from binary options because of that risk. Scammers encourage this style of trading by emphasising the quick returns and their ‘extremely accurate’ software. They ask people to open an account (which has an establishment fee) and then to ‘invest’ for big returns. But when investors want to withdraw their ‘winnings’, they hit a brick wall – they are told there was a sudden loss and are encouraged to invest more, or the people they are dealing with simply disappear.
(BITCOIN) As Bitcoin’s price surged from
roughly US$900 to US$20,000 in the second half of 2017, so did the number of scams offering people a chance to ‘invest’ in the cryptocurrency. Popularised by Facebook ads and in online forums, the scams asked people to invest in ‘clubs’ that would band together to purchase Bitcoin and reap the benefits of the cryptocurrency’s spectacular climb in value. But those who did invest found their money went into bogus accounts and was lost.
OFFERS TO BUY YOUR
SHARES This type of scam is very elegant as it often appears legitimate. Scammers target people who are genuine shareholders and use official-looking letterheads with names that sound like the company you have invested in to initiate a share ‘buyback’. Usually you will even be paid, but the amount will either be much lower than your shares’ worth or the payments are spread over a long period of time. If you feel an offer to buy shares might be legitimate, make sure you first check the company’s listing on the stock exchange for its current value and recent shares performance.