ASIC reports doubling of investment scam losses in 2015
ASIC data indicates that a wide variety of scams, including investment and ‘get rich quick’ scams, continue to hit Australians. Overseas based scammers in particular commonly target consumers in wealthier countries such as Australia. People over 55, many of whom are looking for investment returns in a low interest rate environment, are often most at risk, according to ASIC.
ASIC received 367 reports about scams in 2015, although it believes that the number of actual scams are often under reported. The number of Australians contacted by scammers, and the amounts of money lost, are likely to be much larger than what is reported to ASIC.
In 2015 the top five types of scams reported to ASIC were:
- overseas cold calling about investment opportunities,
- overseas calls offering easy credit or loans after payment of an upfront fee,
- sports arbitrage or gambling schemes,
- money transfer schemes (job opportunity or other fraud), and
- fake debt and invoice scams.
The scams reported to ASIC generally come from overseas. In many cases the pitch to consumers is so professional, slick and believable that it is hard to tell these are not genuine financial opportunities. Scammers have sophisticated sales practices that include call scripts, false paperwork, fake websites and made-up referees.
Typically, investment and financial scams will offer:
- High, quick returns and sometimes tax-free benefits.
- Big rewards for what seems a small upfront payment.
- Discounts for early bird investors.
- ‘No risk’ or ‘low risk’ investments, where ‘you can sell anytime’, get a refund for non-performance or have ‘guaranteed’ transactions.
- Inside information or the opportunity to invest before a public float.
- ‘Magic’ software that claims to predict sporting results or promises to makes you rich through active share trading.