25 September 2023

Interest shown in investment scams

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The Australian Securities and Investments Commission (ASIC) has warned investors to be on “high alert” to avoid being caught up in scams.

Marking National Scams Awareness Week, Deputy Chair of ASIC, Peter Kell said that investment scams had replaced romance and dating scams as the most lucrative method of fraud.

Mr Kell said reports to ASIC about investment scams in 2017 showed that $4.9 million was lost by investors, with an average loss of $82,973.

“In one case reported to ASIC, a complainant lost $1.2 million to criminals operating from overseas,” Mr Kell said.

He said that in another case a retired widow invested $450,000 in overseas listed companies before a relative became aware of the story and alerted ASIC and another woman lost her life savings after dealing with an offshore investment broker who was introduced by a close friend.

“Offshore cold-calling is the most common type of investment scam, where a compelling investment offer is delivered by someone who will then back up the pitch with a slick website, fake research and insistent follow-up calls,” Mr Kell said.

He said the best defence against these scams is “simply to hang up.”

He said the Australian Competition and Consumer Commission’s (ACCC) Scamwatch website took details of $31.3 million lost to scammers peddling sophisticated investment scams, 33 per cent more than was reported in 2016.

The Australian Cybercrime Online Reporting Network reported investment scams that led to $33.2 million in losses.

“Consumers can easily check a caller’s legitimacy by seeing if they appear on ASIC’s Companies You Should Not Deal With list,” Mr Kell said

He said 45 new entities were added to the list last year.

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