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 cold calls

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:

  • What is the name of your company?
  • Who owns your company?
  • What is your address?
  • Do you have an Australian Financial Services Licence?
  • What is your AFSL number?

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:

  1. The Australian Securities and Investment Commission’s database of AFSL licencees.
  2. The Government’s Moneysmart database of ‘companies you should not deal with’.

Legal threats

Legal threats involve scammers informing people they have broken a rule or a law and demanding money to resolve the situation. The threat of sending police or border protection officers is often used to encourage victims to pay quickly. These scams often target the elderly or newly-arrived migrants, who may be less likely to challenge the credentials of someone contacting them.

Types of legal threat extortion include:

  • Fake tax debts, where a pre-recorded voice message is sent, demanding immediate payment of a tax debt and threatening immediate arrest.
  • Visa holders receiving a phone call from an individual posing as an immigration official who claims that the date of birth recorded on their application is incorrect and needs to be updated for a cost. The caller claims that the visa holder will be deported if they don't make this payment.
  • Scammers claiming to be from energy or telco companies, claiming that accounts are overdue and threatening to cancel a service or charge you excessive penalty fees if the bill isn’t paid immediately.

These scams rely on pressure and intimidation to work. If you receive a threatening call, hang up immediately. If you feel that the call could have been because of a legitimate reason, call the relevant organisation using the number on their website.

Never send money or give credit card details, account details or personal information to anyone you don’t know or trust by email or over the phone.

 

If you have been targeted by a scam relating to your Qudos account, visit our webpage Reporting Scams to find out who to contact.

Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305. The information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances.

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