Investment scams
Learn what an investment scam is, and how they work by promising you a quick return but ultimately end with you losing money.
What is an investment scam?
Investment scams can take various forms, including offers to broker deals on your behalf, investment software for you to track your portfolio, or a website. All aim to trick you into giving the scammer your money and getting nothing in return.
Investment scammers may initially contact you via email, social media message, social media advertising, or even text message.
How an investment scam works:
There are many kinds of investment scam, all designed to trick you out of your money.
- Superannuation scam asks you to trick your superannuation provider into letting you get early or extra access to your super, which the scammer then steals.
- Investment seminar scam offers you special insight or hot tips which will be shared via an internet video seminar but charge hundred of dollars in attendance fees and then provide very little useful investment advice.
- Stock tip investment scam offers special insight or hot tips, and when you (and thousands of other victims) buy the stock the scammer sells it for a quick profit and disappears.
How to protect yourself against investment scams
Remember that all investment scams are get-rich quick schemes and promise high rewards with low risks.
Never invest with a company or person who claims they have special knowledge or hot tips that will double your money or guarantee very high returns in a short period of time.
You should also:
- Avoid unsolicited investment opportunities, and always do your own research rather than respond to an ad or a cold call
- Check investment companies with ASIC, via the Investing and Financial Advice for consumers page at https://asic.gov.au/for-consumers/investing-and-financial-advice/
- Also check ASIC’s list of known scammers at https://moneysmart.gov.au/companies-you-should-not-deal-with
- Google search the company only using the terms complaint and scam
- Be suspicious of offers from anyone who you met online, especially if they have been making romantic overtures
- Ignore celebrity endorsements and cryptocurrency investment offers.
What to do if you are scammed
Most investment scams involve the victim paying the scammer voluntarily, but scammers can still use this to gain access to a victim’s computer or finances.
If you think you’ve become involved in an investment scam, it’s important to act quickly to protect your finances and identity:
- Contact your financial institutions to change your passwords and cancel/reissue credit and ATM cards
- See if you can get a payment reversed. This is often not possible but always worth a try
- Change your important passwords such as your main email address and the password/passcode you use to sign into your computer
- If your superannuation is involved, call your super provider and ask for the scam department and they will help you protect your super
- Report scams to the ACCC’s Scamwatch service at www.scamwatch.gov.au/report-a-scam. This web page includes a form you can fill out, and provides links and information on how to get help
- You can also report the scam as a cybercrime at the Australian government’s cyber.gov.au website
- Cease contact with the scammer and ignore all further messages and emails.
You should never attend an investment seminar, as these scams pressure you to pay more and more money for materials and other useless things. If you’ve paid an attendance fee, just write off that cost or try to reverse the payment.