Steer clear of sports investment schemes

2 November 2009

It’s racing season and you may get the urge to splurge—if you do, SCAMwatch is warning you to be very careful if you think you can improve your odds with the aid of sports ‘investment’ opportunities.

Businesses selling these sports investments have sidelined their arbitrage schemes and gone back to selling rebadged versions of ‘sports tipping services’ and ’horse race betting software’. These so called investment opportunities have cost Australians more than $20 million in recent years. While the majority of these businesses operate from the Gold Coast; consumers all over Australia are being targeted.

Don’t be fooled—although they make claims such as “tax free wealth”, “strategic investment”, "investment not gambling", “recession proof”, “invest in the thoroughbred racing industry”—these schemes are not investment opportunities, they are just another form of gambling.

Some consumers have been lured into paying almost $20,000, plus bets, for systems that simply cannot deliver the wealth they promise. The scammers are not interested in making you wealthy, all they want to do is take your money and run.

Scammers trick unwary and vulnerable consumers into investing in these schemes by using bogus forecasts of strong profits and steady income, glossy brochures, professional looking websites and graphs showing high returns. Be on your guard, it is easy for scammers to manipulate or fabricate results.

Even consumers who are wary and sceptical may find themselves drawn into these schemes. The scammers are persistent—they will tell you can 'try before you buy'. During the trial period, you’ll find your online account will always show significant profits. Unfortunately, these profits aren’t real and will disappear along with any customer support as soon as you hand over your money to buy into the scheme.

SCAMwatch warns:

  • Do not assume that because a business is registered with ASIC, it’s trustworthy—registering a business is cheap and easy to do and does not guarantee ethical behaviour.
  • Do not believe claims that schemes have been ‘cleared’ by the ACCC and Queensland Office of Fair Trading (QOFT). Claims like this should raise alarm bells—the ACCC does not clear businesses for advertising or marketing.
  • Consumers risk losing their identity along with their money when they buy into these schemes—one business recently left behind boxes that contained details including names, addresses and other personal information when they vacated their premises.

Protect yourself

  • Get–rich schemes don’t work! The only person that benefits from get–rich schemes is the scammer.
  • If it sounds too good to be true, it probably is. Ask yourself—why would someone sell it to me?

Report

You can report the matter through the report a scam page on SCAMwatch.

More information

Explore SCAMwatch to find out more about investment scams (get-rich-quick schemes), identity theft and tips on how to protect yourself.

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