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Investing can be a great way to get your money to work for you. Well-chosen investments can grow over time and help you reach your financial goals more quickly. All investments carry some degree of risk though and some investment opportunities are riskier than others.
Preying on the potential of high returns, investment scams are one of the most frequent type of fraud reported to the Australian Consumer Complaints Commission’s Scamwatch website, comprising over 40% of all scam reports made in 2019.
Investment scams often begin with an unsolicited call from someone claiming to be a financial adviser or investment broker promising very high returns with little risk. The promises may sound too good to be true, and it’s likely that they are.
Callers may spend considerable time building up their credentials, including sending through official looking documentation to convince victims of their legitimacy. What they are unlikely to be able to provide is an Australian Financial Services Licence (AFSL) number, which is required to deliver personal financial advice within Australia.
If you do receive a cold call or respond to advertisements offering an investment opportunity, it’s a good idea to ask questions such as:
If they can’t answer these types of questions or claim that they don’t need an AFSL to offer you advice then you should end the conversation.
Two valuable resources to help check the validity of anyone you are speaking to are:
Fraudsters often present scams as investment opportunities that few other people know about and that need to be taken advantage of now, or you may miss out.
Common investment scams include:
Following a similar pattern to the investment scams listed above, sports betting scams appear to offer guaranteed returns with minimal risk. Common sport and betting scams include:
Scams like this may appear legitimate, but frequently the only winners are those perpetuating the scheme.
Cryptocurrency is new to most Australian investors, which can make it difficult to differentiate legitimate opportunities from potential fraud. As well as the investment risks that any new form of investment poses, there are also a range of dishonest practices to look out for:
If you are considering investing in cryptocurrency then it can a good idea to only use major cryptocurrency exchanges and invest in well-established coins until you are familiar with the market.
How to keep yourself safe from investment scams
If you have been targeted by a scam relating to your Qudos account, visit our webpage Reporting Scams to find out who to contact.