Scams on the rise
The Australian Securities and Investments Commission (ASIC) has seen a rise in the number of investment scam reports from consumers and investors during the COVID-19 pandemic.
Reports of misconduct received by ASIC from March to May, 2020, were up 20% compared to the same period last year.
ASIC said that although reports from the public provided the regulator with valuable intelligence, scammers were difficult to catch and lost money was difficult to recover, especially if the scammers operated outside the country.
ASIC said scammers often:
- Present a range of investment offers – from modest returns to high returns – that sound safer than they were;
- Made persistent requests to continue investing despite no evidence of actual returns on initial investments;
- Display fake endorsements from celebrities or government agencies, including ASIC;
- Request money be paid to a person or company into multiple or constantly changing bank accounts; and
- Lure someone via a romance site and direct them to send money or invest in crypto-assets or forex trading.
Warren Day, ASIC executive director for assessment and intelligence, said economic uncertainty due to the pandemic had created a “perfect storm”.
“Australians are at risk of being scammed and losing money, and scammers are using age-old tactics in new and sophisticated ways to target people,” Day said.
“ASIC is particularly concerned about the risk to consumers and investors losing money when buying into fake crypto-assets.
“Most crypto-asset investment opportunities reported to ASIC appear to be outright scams and there is no actual underlying investment.”
If you or someone you know had been scammed, you can lodge a report of misconduct with ASIC.
AUTHOR
Chris Dastoor
Recommended for you
The new financial year has got off to a strong start in adviser gains, helped by new entrants, after heavy losses sustained in June.
Michael McCorry, chief investment officer at BlackRock Australia, has detailed how investors are reconsidering their 60/40 portfolios as macro uncertainty highlight the benefits of liquid alternatives.
Having reset its market focus to high-net-worth advisers, Praemium’s administration solution has been selected by Bell Potter in a deal that increases the platform's funds under administration by $6 billion.
High transition rates from financial advisers have helped Netwealth’s funds under administration rise by $3.7 billion in the fourth quarter of FY25.
