Investment scammers are getting smarter … you must too

Investment frauds are rampant online but you can protect yourself and your portfolio with these steps.

Victims of scams may need to change their passwords.

With fraudsters becoming more sophisticated, there are increasing reports of investors being caught out in online scams, resulting in emotional and financial stress.

If you are a victim of a scam, you are not alone, with the Australian Competition & Consumer Commission reporting that Australians lost over $200m to scammers last year.

Many were caught out in 2021 by scammers impersonating government agencies, including the Australian Border Force and even the Australian Taxation Office. The ATO scam focused on obtaining personal and financial details to pay a fictional tax refund.

Just as the global Covid-19 pandemic has forced more people online, scammers have also resorted to online ploys to separate unsuspecting Australians from their money, with fake websites and emails established to mimic real companies.

Fortunately, the majority of scams are easy to identify if you know what to look out for. And once you suspect a scam, there are actions you can take to ensure you are not duped, and to possibly even help catch the scammer and protect others from falling for the same tactics in the future.

Validate your suspicion

If you receive a notification from a financial provider and become suspicious, there are a number of ways to check the authenticity of the communication. Check the full name, address and Australian Financial Services Licence (AFSL) number of any financial provider against the Australian Securities & Investments Commission’s database.

In the case of a financial offer being made through a website, check that the website being ­quoted is correct by doing a simple Google search for the provider or company and comparing that URL to the one you have been given.

If you are dealing with an individual and you have their name, check that they are associated with the provider by searching for them on LinkedIn. If still in doubt, do a Google search for the head office, call and check that the person works there.

It’s also important to check that the style of the communication is consistent with a reputable provider – spelling mistakes or poor grammar are a warning sign that something is not right.

Have you made a payment?

If you have transferred money and you are later concerned, immediately contact your bank. The best way to get your money back is from your bank. Historically, banks have been successful at getting all or a proportion of people’s money back. The sooner you contact your bank, the better.

If you paid with cryptocurrency, however, you have most likely lost your money, as it falls outside of the regulated payments system.

If you haven’t made a payment, you still may not be in the clear.

It is important to take stock of what personal details you may have provided.

You may need to consider any potential online threats and whether you need to change passwords or upgrade your privacy or security settings, particularly if you have disclosed personal details that could be used as part of an identity theft scam.

Contact the authorities

There are several kinds of scams you can report through the police’s Australian Cyber Security Centre. These include identity theft and fraud, online fraud, hacked devices, image

You can make contact with the police at cyber.gov.au/acsc/report.

Don’t forget the ACCC

You can also report the scam to the Australian Competition & Consumer Commission at www.scamwatch.gov.au. However, if you are reporting an email or other document that may contain malware or other viruses, ensure you do not forward the infected document to the ACCC. Instead, simply include the details of the document in question in your communication.

Additional scam reporting

If you are aware of a financial scam, it is important to also report it to ASIC at asic.gov.au.

ASIC will make a record of the report you submit and assess the claim within 28 days to see if the report will be escalated to a specialist team. From here, ASIC will most likely take action if the report is in the interest of the wider public. Yet the record you submit will help ASIC in identifying problems, identify future targets for surveillance, help in case selection, and help in providing guidance and warnings.

Identity fraud

If it is a case of identity fraud, it is important to notify the entity involved. While the entity being impersonated cannot typically help you to recover your funds, they may not be aware of being targeted and notifying them can help prevent others becoming a victim. Once notified, they can take action to get fake domains or websites taken down.

It’s a difficult area but there are a number of actions you can take to protect yourself and others from scams. Be sure to report the scam to all the relevant parties to help ensure the scammers are stopped from inflicting emotional and financial stress on others.

Monique Batterham is head of compliance and risk at Schroders.

Originally published as Investment scammers are getting smarter … you must too