We’ve all seen media reports about ordinary Australians losing their entire savings after responding to a phone, email or mail offer that was impossible to resist. While it may seem that some people are just naïve, scammers are also getting more sophisticated and it can be easy to be fooled.

Financial stings have become a serious threat to Australian consumers and businesses. The Australian Bureau of Statistics reported that almost six million Australians are exposed to scams and frauds during any given year. More than 1.2 million fall victim to personal fraud, losing an estimated $1.4 billion.

Identity theft scams involve someone stealing another person’s identity and doing anything with it from cleaning out bank accounts to taking out fake mortgages. But scams can come in many guises, including:

  • Online account and money transfer scams;
  • Health and medical scams;
  • Superannuation scams;
  • Get-rich-quick scams;
  • Lottery and competition scams.

What to look for

Scammers know and use all sorts of tricks to entice the vulnerable but there are steps you can take to protect yourself. Let’s look at investment scams…

Scammers usually make contact “out of the blue” with a blanket offer and use tactics to pressure you into the deal. They will often claim to be a stockbroker or portfolio manager offering financial or investments advice. These “professionals” try to make their offer look as genuine as possible and most will have any or all of the following features:

  • Quick, high returns and sometimes tax-free;
  • No-risk for the investor;
  • Mention well-known companies or people (that are actually not involved);
  • Discounts for “early-bird” investors or special allocations not available through anyone else.

Investment scams can appear very professional on the surface. By the time the victim realises the offer was too good to be true, the scammer has disappeared with their money.

What should you do?

If you receive a call or email always check the validity of the offer and provider, by asking:

  1. What is your name and what company do you represent?
  2. Does your company have an Australian Financial Services licence and what is the licence number?
  3. What is your physical address?
  4. Ask for some time to think about the offer and make sure you get everything in writing.

If the caller can’t or won’t provide these details, it will be a scam. If they do answer, take down the details and check the Australian Securities and Investment Commission list on its MoneySmart website or the Australian Competition and Consumer Commission (ACCC) ‘SCAMwatch’ site.

Be proactive

Some scams aren’t as obvious so always protect your personal information. Never give out bank details or transfer money to anyone you don’t know or trust.

Always check your statements and report any suspicious transactions to your financial institutions. Make sure your computer and mobile devices are protected with strong passwords, anti-virus software and firewalls.

And beat the scammers at their own game – if you are contacted by one of these fraudsters, immediately report it to the ACCC via or phone 1300 795 995. Hopefully the scammer will end up the victim instead.

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