Scammers are out and about in force at this time of year and it’s important to be aware of a particularly common type of scam known as investment scam. Australians lose more money to investment scams than any other type as they are usually quite complex and difficult to identify.
You’ll find scammers using convincing marketing and new technology to make their investments sound too good to miss. They can promise fast results with large returns at a low risk with pressure tactics to get you to act quickly.
Here are a few warning signs:
- Fake news stories or ads that claim a celebrity recommends this scheme to make big money.
- An online contact (a friend or romantic interest) that you’ve never met in person starts talking to you about investing.
- Emails, websites or ads with testimonials and over-the-top promises of big returns.
- High pressure tactics designed to rush you to act so you don’t ‘miss out’.
- The ‘adviser’ who is helping you claims they don’t need an Australian financial services (AFS) license.
- You are asked to promote the scheme to friends and family to earn commission.
How you can protect yourself:
- Always stop, think, and check before you act. These scams will often pressure you to act quickly. Don’t let them rush you into a bad decision.
- Get independent legal advice, or financial advice from a financial advisor.
- Do your due diligence to make sure you know who you’re dealing with.
- That the person you are dealing with works for the organisation they say they do, using contact details you found yourself.
- The person trying to sell you a financial or investment product, or who is giving you financial advice, has an Australian financial services (AFS) license.
- The address and contact details for the company are correct on public listed directories.
- The company’s share listing on the stock exchange. If the offer to buy the shares is well below the market value shown – it’s a scam. If you are told the shares are being released pre – initial public offering (IPO) be even more cautious.
- When the domain name was registered. A new website for an existing company is a red flag.