Be suspicious of anyone offering you easy money. Scammers are skilled at convincing you that the investment is real, the returns are high and the risks are low. There’s always a catch.
There are three main types of investment scams:
In any case, the money you ‘invest’ goes straight into the scammer’s bank account and not towards any real investment. It is extremely hard to recover your money if it goes to a scammer based overseas.
Anyone can be scammed and every scam is different. Scams are often very hard to spot and can feel legitimate in the moment. Scammers can use professional-looking websites and apps, and impersonate legitimate companies.
Important:Beware of scammers offering investments or asking for payment using crypto-assets. Crypto-assets (for example, cryptocurrency) are largely unregulated in some countries and are high-risk, volatile investments. Payments using crypto are very difficult to trace and recover.
Scammers can come from anywhere. The most common approaches are:
A scammer may tell you they’re offering:
Scammers will look at the latest investment trends for opportunities. They often use well-known company names, platforms, and terms (such as ‘crypto’) to lure investors in and appear credible.
This may include fake:
Cryptocurrencies are digital currencies. Bitcoin is the most well-known form of digital currency. In some countries, cryptocurrency is not treated as ‘money’ or a ‘financial product’ and you have less protection if you invest and it turns out be a scam or you lose a lot of money.
It is very difficult to identify legitimate cryptocurrency investments from scams. Scammers take advantage of the hype and the less regulated environment to ‘invest’ in Bitcoin or another cryptocurrency on your behalf.
Before you invest you should ask yourself if you are willing to lose some or all of the money you have invested and know that if you go ahead you are investing with little or no protections behind you.
Cryptocurrency investment scammers are convincing. They may advertise or post on social media offering great returns from cryptocurrency trading. If you click on the advertisement or post, the scammer will contact you or you will be directed to a fake website. The scammer will offer to make an investment on your behalf, or provide details of an app or website through which you can invest.
Cryptocurrency scammers also commonly use platforms such as Discord and Telegram to contact people.
The scammers will encourage you to buy cryptocurrency through an exchange or request you send money to a company for them to do so on your behalf. They will then claim to either trade on your behalf, or coach you through making trades yourself. You will be able to see the profits you have made on a webpage, app or custom MetaTrader platform.
The data you can see will be fake and will show you profiting (or losing as a way to get you to invest more money). Eventually you will be unable to withdraw any money.
The scammers will make excuses for delays in withdrawals, you are banned from the platform or the trading platform is closed. When you try and find out what has happened, the scammers cannot be contacted and your money is gone.
A scammer claiming to be a stock broker or portfolio manager calls, emails or contacts you on social media and offers financial or investments advice. They may even claim to be from an investment firm or company you have heard of, as scammers sometimes impersonate these businesses to seem legitimate.
The scammer will claim what they are offering is low-risk and will provide you with quick and high returns, or encourage you to invest in overseas companies.
The scammer’s offer will sound legitimate and they may have professional looking websites and resources to back up their claims. They will be persistent, and may continue to contact you until you agree to invest.
The scammer may claim that they do not need an Financial Services licence, or that that they are approved by a real government regulator or affiliated with a genuine company.
The investments offered in these type of cold calls are usually share, mortgage, or real estate high-return schemes, options trading or foreign currency trading. The scammer is usually operating from overseas, and will not have an Financial Services licence.
There is a kind of online romantic scam in which a cybercriminal creates a fake online identity to attract the victim. This method is also commonly referred to as catfishing.
The scammer sets up a fake dating profile and will connect with you on a dating website, dating app or social media.
The scammer will ask to continue chatting to you off the dating website or app, typically on a free but encrypted chat site such as WhatsApp, Google Hangouts or WeChat. They may say they want to do this as these chat sites are ‘more private’.
Scammers will make an effort to build your trust and will often do things like express strong emotions for you in a short period of time and share lots of ‘personal’ things with you.
Once they have gained your trust the scammer will tell you about an investment opportunity. Often, they say they have invested a small amount of and made a lot of money very quickly. They will encourage you to initially transfer a small amount of your own money to show how easy the investment is. You may see a quick return. The scammer then encourages you to invest larger amounts.
The scammer will tell you to top up your accounts to increase your profits. If or when you run out of money to transfer or want to withdraw all your funds, the scammer will cease all communication. You will then be unable to obtain your investments from the platform or be told the investment has gone wrong.
Scammers use the image, name and personal characteristics of well-known celebrities without their permission, to entice you into investing. Fake celebrity endorsements are often used to advertise scam cryptocurrency schemes.
The way the celebrities’ image is used can take two forms:
The investment adverts or news stories make claims about investment opportunities with huge returns and will typically link to a scam website, often involving a cryptocurrency investment ‘opportunity’.
Ponzi schemes are scams that use funds collected from new investors to pay existing investors. No real investment exists and eventually these schemes collapse.
Scammers contact people on social media and asking them to download or invest through apps. They promise you will see high returns very quickly and you will think you do, but the scammer uses money other people have invested to pay you some return.
Once you have seen a return, the scammer will persuade you to encourage your friends, family and colleagues to invest in the same scheme.
They will pay them ‘returns’ and ask them to recruit people they know into the scheme as well.
Eventually, when the scammer runs out of money or the pool of people being recruited dries up, the scammer will disappear and no one will be able to recover their money.
The scammer encourages you to buy shares in a company they predict is about to increase in value. You may be contacted by email, via social media or the message will be posted in a forum. The message looks like an inside tip and will usually stress that you need to act quickly. The scammer is trying to boost the price of stock so they can sell shares they have already bought, and make a huge profit. The share value will then go down dramatically.
If you invest you will be left with large losses or shares that are virtually worthless.
Investment seminars may be promoted by promising motivational speakers, investment experts, or self-made millionaires who will give you expert advice on investing, with the purpose of convincing you into following high risk investment strategies. These strategies may include borrowing large sums of money to buy property, or investments that involve lending money on a no security basis or other risky terms.
The promoters may charge you an attendance fee, sell overpriced reports or books, and sell investments and property without letting you get independent advice.
If you invest there is a high chance you will lose money.
Superannuation scams offer to give you early access to your super fund, often through a self-managed super fund or for a fee. The offer may come from a scammer posing as a financial adviser. The scammer may ask you to agree to a story to ensure the early release of your money and then, acting as your financial adviser, they will deceive your superannuation company into paying out your super benefits directly to them. Once they have your money, the scammer may take large ‘fees’ out of the released fund or leave you with nothing at all.
You cannot legally access the preserved part of your super until you are between 55 and 60, depending what year you were born. There are certain exceptions such as severe financial hardship or compassionate grounds – but anyone who otherwise offers early access to your super is acting illegally.
If you think you’ve been scammed
Article Source: scamwatch.gov.au – moneysmart.gov.au
Before you start risking your money, check the credibility of the desired website. Search for its URL in the our long list of Scam sites, or send us a request to check its validity, and do not register, buy or invest in it until you are sure of the validity and legality of that website or platform.