How to stop investment scams as Australians’ losses increase

MILLIONS of dollars are still being lost to investment scammers as their tactics become more sophisticated, but this can help stop you from getting burnt.

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.

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

Investments that sound too good to be true are probably trying to lure you into a scam.

“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 is.

Laura Higgins, senior executive leader at ASIC’s MoneySmart, said before signing up to any investment people should do their homework to make sure it was 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 that 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. The more we hear about scams, and the more intelligence we have, the greater our chances of preventing the next one,” Ms Higgins said.

@keanemoney

Originally published as How to stop investment scams as Australians’ losses increase