Share promotions and ‘hot tips’, also known as ‘share ramping’, are scams that usually come in the form of an email or a message on an internet forum. The messages usually encourage you to buy shares in a company that they predict is about to increase in value.
The person offering you this advice is usually either someone who wants to increase the share price so that they can sell their own shares for a profit, or a mass-marketing company paid by the scammer to send out thousands or even millions of emails.
These scams work by giving the impression of an ‘inside tip’ and stressing that you need to act quickly. The scammers are trying to boost the price of the stock so they can sell shares they have already bought and make a huge profit. The share value then goes down dramatically. The people who bought shares based on the advice in the messages can be left with large losses, or with shares that are just about worthless.
You receive an unexpected or unsolicited email offering you advice on the share price of a particular company.
The message will claim that the share price has recently increased by a large amount, or will do so after an ‘opening announcement’ (eg a drug approval, an upcoming merger, or a technology ‘breakthrough’).
The message has some ‘nonsense’ text before and/or after the share tip—for instance, words that look like a sentence but don’t make any sense (this is done to avoid spam filters).
The message usually won’t be addressed to you personally and may even give the impression that it has been sent to you by mistake. The messages are usually not signed.
The most important question to ask when you receive a share promotion scam, is ‘If these shares are about to go up, why are they telling me about it?’ Why would someone with a quick way to make a lot of money share it with anybody else? Hot tips are usually sent to hundreds of thousands of email addresses. Don’t be fooled by an email that looks like it is addressed to someone else (and sent to you by mistake) as this is all part of the scam.
The chances of a share promotion email being anything other than a scam are very slim. If you feel that there may be some truth in the offer, look for the company’s listing on the stock exchange and check its value and recent performance. Do NOT reply to the email or internet forum post for more information—consult an independent source.
If you really think there's potential in a piece of uninvited investment news you receive, ALWAYS check with an independent, qualified financial adviser licensed by ASIC before you take any action.
Ignore the email or internet forum post. If you really think the tip might be real, DO NOT reply to the email. Check with an independent financial adviser instead.
Don't risk any money on uninvited emails. Only go ahead if you are sure of the email source and have checked the investment with a financial adviser. If you do decide to go ahead, use a stockbroker or share trading service based in Australia. DO NOT reply to the unsolicited email. If you do reply the scammer may request a deposit or your bank account details, and flood you with more spam.
You are offered early access to your superannuation (‘early release’), often through a self-managed super fund. The scammers take a large part of your super for themselves, and put you at risk for accessing your super in an illegal way.