With the frequency of investment scams on the rise, let’s take a moment to understand what a scam looks like and how to stay scam alert to reduce the risk of fraud and you potentially losing your hard-earned savings.
What are investment scams?
The three main types of scammers:
• The investment they offer is not real.
• The investment is real; however, your money does not go towards the investment.
• The scammer claims to be with a reputable company; however, this is a lie.
An investment scam is usually instigated when someone contacts you out of the blue offering a chance to invest in a rare opportunity that promises a high return with low risk.
The contact can come via multiple channels – usually it’s by phone call, email, digital ads, or social media messages.
The type of investment offer can be for shares, real estate, term deposits, bonds, mortgages, foreign currency trading, crypto currencies, betting syndicates or even software apps claiming to increase your revenue or productivity in unprecedented ways.
Scammers can pose as industry authorities – such as bankers, advisors, ‘real’ people who claim to have also invested, stockbrokers or industry agencies such as marketing companies.
They appear confident and an authority on the industry. Their offer can direct you to legitimate looking websites or social media accounts with convincing stories and testimonials, so that’s why it’s crucial to do your research and due diligence before engaging with them.
Online investment scams have also been known to use celebrities’ names and pictures “endorsing” the deal – without any approval or real connection. If you see an ad like this – be scam alert!
What to be wary of and steps to take:
• If the deal sounds as good as winning the lotto, it probably isn’t. Always treat anything that seems too good to be true as most likely fake. Always get a direct second opinion from a trusted and qualified person before doing anything, especially where the investment source has come from phone or email.
• Looks can be deceiving. Scammers might direct you to professional looking websites, apps, or social media platforms/accounts to fact-check their claims. These platforms could contain real looking testimonials and case studies with attractive Return on Investment (ROI) to appear credible, but they might not be real.
• If getting a new financial advisor, check their credentials the ASIC website. Investment scammers who pretend to be advisors have been known to plagiarise their credibility on their website and include ASIC accreditation, so always go direct to ASIC to double check.
• You can only see your investment on one device. If you cannot access your investment from apps located from the app store or websites accessible across multi-platforms, it’s likely the investment is a scam.
• Always call your bank before engaging in investments you are not 100% sure. At SCCU, we are up to date with the latest scams and our team is prepared to help you look for identify any red flags before you proceed with the transaction.
If you are suspicious of scams or need help detecting transaction fraud, please act immediately. One key thing to remember, if you have never seen the number, message, or email address before, just delete it.
Reporting scams: You can report all suspicious activity to the Australian Cyber Security Centre here.
You can also stay scam alert with us by keeping an eye on our security page – which is updated regularly with the latest scams and advice!