Tropical hide-aways become scamster’s paradise
Wealth creation seminars and internet scams involving exotic tropical locations have been singled out by the Australian Securities and Investments Commission as featuring prominently among the 76 illegal investment schemes it shut down in the last financial year.
Short-term unsecured loan investments, investment seminars on tropical islands and loans for luxury cars were prominent among the extinguished schemes, with an extra 25 per cent discovered by the corporate regulator to the end of June.
The 76 illegal schemes involved more than 2,150 investors who invested a total of about $220 million - an average of about $102,000 each. Five promoters of illegal investments received jail sentences.
Collier said one type of scam that was particularly popular involved investment seminars held in exotic locations, such as Vanuatu or Samoa.
“There's nothing to suck you in like an exotic location, some wealth around you and (the thought that) if I invest, I can have more of this,” she said.
Another common type of scam involved luring investors into paying a deposit and borrowing the price of a luxury car.
Investors were then promised that the amount they borrowed would be sent offshore to generate enough returns to pay off the loan.
“But of course the money just went west and most people were left owing money on the loan, losing their deposit and losing the car,” she said.
Retirees and ethnic groups were particularly vulnerable to illegal investment schemes, according to Collier, partly because these two groups are more likely to live in communities and scamsters are often more likely to attack collectives.
"For a scamster it’s a happy coincidence of money and people who can pass on information by word of mouth."
She urged consumers that any investment opportunities that sound too good to be true usually are.
“One rule of thumb is to see if the person who is giving you the advice has an Australian Financial Services Licence, she said.
She also urged investors to check if the scheme has a product disclosure statement.
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