Scamwatch data, published by the Australian Competition and Consumer Commission (ACCC) shows that $85 million was reported lost last year, with 105,200 scam complaints.

An additional $127 million from 25,600 complaints was reported to the Australian Cybercrime Online Reporting Network (ACORN) while unreported scam activity is predicted to be around $17.1 million – bringing the total lost to a huge $229 million during 2015, with the over 55s hardest hit.

These scams pose a significant risk for Australians looking for investment opportunities, especially those looking to grow their retirement funds. These scams accounted for half of the money reported lost by over 55s in 2015. The low interest rate environment has led to those semi-retired or retired searching for investments with higher returns, and scammers are preying on them.

According to ASIC, the the top five types of scams reported to ASIC in 2015 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.

ASIC said that the scams it has reported generally come from overseas.

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.

Scammers dress up ‘opportunities’ with professional looking brochures and websites to mask their fraudulent operations and trick unsuspecting Australians.

For any Aussies with concerns, ASIC suggests they ask the following questions to confirm their legitimacy:

  • What is your name and what company do you represent?
  • Who owns your company?
  • Does your company or scheme have an Australian Financial Services Licence (ASFL) or an Australian Credit Licence (ACL) and what is the licence number? Check this number on ASIC’sProfessional Registers.
  • What is your address?

If they try to avoid answering these questions, it is a scam. And if one gets caught out, they need not send good money after bad.

Investors can protect themselves against investment scams by:

  • taking time to consider investment opportunities,
  • checking ASIC’s MoneySmart website for the list of companies you should not deal with,
  • checking the company’s listing on the stock exchange for its current value and recent share performance,
  • checking the company is real by calling their publicly listed phone number and
  • by getting a second opinion from a licensed financial adviser.

People should avoid

  • sending money overseas for an investment offer that’s out of the blue,
  • feel pressured into making an investment decision
  • invest in a managed fund or other investment that’s not licensed by Australian Securities and Investments Commission (ASIC)

More details here:
1. https://www.mywealth.commbank.com.au/strategies/australians-tricked-out-of–229-million-last-year-hottopic201605

2. https://au.finance.yahoo.com/news/top-five-aussie-investment-scams-to-avoid-052451058.html