Warning to business owners on investment scams including cryptocurrency

They may be slick talking, have investment or financial industry backgrounds, can answer your concerns, boast professional looking company websites promoting success - but in reality they're criminals.

If you haven't heard from them yet, get ready. They'll likely be coming to you soon via a phone call, email or text message to convince you they can invest your cash for big, tempting returns in stocks, real estate or commodities.

And if business is a bit flat, you may be tempted to boost income with an external investment. Don't!

Figures released today by the Australian Consumer and Competition Commission (ACCC) show that so far in 2018, more than $26 million has been reported lost to investment scams, a month-on-month increase of 117 per cent over 2017 or more than $4 million every month.

ACCC Deputy Chair Delia Rickard, said that in 2017 losses of $64.6 million were reported to the ACCC Scamwatch and the Australian Cybercrime Online Reporting Network (ACORN).

“The losses to investment scams are horrific. Each week the ACCC receives heartbreaking accounts of people losing hundreds of thousands, and in some cases millions, of dollars,” she said.

"If the current trend continues, combined losses reported to Scamwatch and ACORN in 2018 could be in excess of $100 million.

“These scams are very sophisticated and the scammers are very convincing. People aged 45–64 are most at risk and make up more than half the reports sent to Scamwatch."

The majority of investment scams are still centred on traditional investment markets like stocks, real estate or commodities.

Scammers cold call victims claiming to be a stockbroker or investment portfolio manager and offer a ‘hot tip’ or inside information on a stock or asset that is supposedly about to go up significantly in value. They will claim what they are offering is low-risk and will provide quick and high returns.

“Scammers will spend significant time and effort grooming their victims to invest,” Ms Rickard said.

"They will use the right technical language and also offer professional looking websites and documents to convince victims they are legitimate. It’s often only when people try to cash out their investment that they realise their money is gone."

Cryptocurrency trading and binary options (all or nothing return) scams are growing significantly. Cryptocurrency trading is now the second most common type of investment scam being peddled.

“The rise in popularity in cryptocurrency trading has not been missed by scammers who are latching onto this new trend to con people,” Ms Rickard said.

"These are similar to any other investment scam: the scammer will claim to have inside knowledge about price movements they will use to make you a fortune. If you invest, your money will quickly disappear.

“Binary options trading involves scammers pretending they can predict the movements of a commodity, asset or index prices over a short time. They direct you to a website with a login, account details and a trading platform.

"They appear to put your money into the account and demonstrate a number of successful trades to encourage you to invest greater sums. Then your money begins to disappear and so too does the scammer.”

The clearest warning sign you’re dealing an investment scammer is how they contact you and the promises they make.

“It can be very difficult to tell what is and isn’t legitimate these days. If someone calls, emails or texts you out of the blue with investment advice, don’t engage them no matter how legitimate they sound," Ms Rickard said.

"Hang up the phone, or delete the email or text. If you’re searching for new investment opportunities online, don’t always trust what you read. It’s easy for scammers to create professional looking investment websites.

“Any claims like 'risk-free investment', ‘low risk, high return’, 'be a millionaire in three years', or 'get-rich quick' are also easy tells that you’re dealing with a scammer.”

The Australian Securities and Investment Commission (ASIC) says that the majority of scammers are based overseas because it doesn't have the international jurisdiction to investigate them.

But ASIC maintains listings of unlicensed companies that have run unsolicited calls and email campaigns to Australians and do not have a current Australian Financial Services licence.

The most recent additions to the ASIC list include:

  • PRU Structured Assets

  • Capital Invest Solutions

  • The Adam Group (also known as Adam International Trading Group Ltd, Adams Group International, Adams Group)

  • Oakfair Investment

  • Ashton Cole Global

  • HQ Broker

  • Alliance FX Capital Ltd

  • Marc Hermann Wealth Management

  • Johnson Financial Consulting

  • Canyon International HK

ASIC recommends that if you have been approached with an investment option, first check if the company is listed as an unlicensed company If they are not listed, you should check the company or person's name against ASIC Connect's Professional Register.

If the company or person is not licensed, do not deal with them. Instead, report them to ASIC which will allow others to be warned.

Ms Rickard said that if you are keen to invest, start by visiting ASIC’s MoneySmart website.

"This a fantastic resource that explains the steps you should take before committing to an investment and how to avoid scammers," she said. You can report investment scams to ASIC or Scamwatch.

#Finance #Scam #ACCC #Emailscams #SmallBusiness #Fraud

116 views0 comments