Australians are losing $4.3 million a month to scams, according to the latest statistics from Scamwatch, and people aged 45 to 64 are most at risk.
More than $26 million has been reported lost to investment scams this year – 84 per cent of the total losses in 2017 with five months to go.
Australian Competition and Consumer Commission (ACCC) deputy chair Delia Rickard labelled the losses ‘horrific’ and said the accounts of people losing hundreds of thousands of dollars were ‘heartbreaking’.
“Last year, Australians reported they lost $64.6 million to investment scams to Scamwatch and the Australian Cybercrime Online Reporting Network (ACORN). If the current trend continues, combined losses reported in 2018 could be in excess of $100 million.
“… the scammers are very convincing. People aged 45 to 64 are most at risk and make up more than half the reports sent to Scamwatch.”
Ms Rickard said most investment scams were centred on traditional markets such as stocks, real estate and commodities. For example, scammers will cold call victims claiming to be a stock broker or investment portfolio manager and offer a ‘hot tip’ or inside information on a stock or asset. They will claim their offering is low-risk and will provide quick and high returns.
“Scammers will spend significant time and effort grooming their victims,” she 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.”
Two other types of investments where scams were prevalent were cryptocurrency trading and binary options, with cryptocurrency scams now the second most common type of investment scam.
Ms Rickard explained that binary options trading involved scammers pretending they could predict the movements of a commodity or asset 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.”
So what are the warning signs? The strongest, she said, was how the scammer contacts the victim and the promises that are made.
“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 with them no matter how legitimate they sound. 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,” Ms Rickard said.
“Any claims like ‘risk-free investment’, ‘low risk, high return’, ‘be a millionaire in three years’ or ‘get rich quick’ are also easy [signs] that you’re dealing with a scammer.”
She said prospective investors should visit the Australian Securities and Investments Commission (ASIC) MoneySmart website for guidance and always check ASIC’s list of companies not to deal with.
Report investment scams to ASIC and Scamwatch.
Have you had any contact with a suspected scammer this year? Did the information sound too good to be true?