Investment scams

Investment scams involve promises of big payouts, quick money or guaranteed returns. Always be suspicious of any investment opportunities that promise a high return with little or no risk – if it seems too good to be true, it probably is – and is highly likely to be a scam.

Australians lose more money to investment scams than any other. They can be hard to spot, so before investing always seek independent legal advice or financial advice from a financial advisor who is registered with ASIC.

Before you invest

If you are considering investing, always remember to:

  • Check if a financial advisor is registered via the ASIC website. Any business or person that offers or advises you about financial products must hold an Australian Financial Services (AFS) licence.
  • Check ASIC's list of companies you should not deal with. If the company that contacted you is on the list – do not deal with them. But even if they are not on the list it could still be a scam.
  • The MoneySmart website also contains information about how to avoid investment scams.
  • Search for the company online plus “review”, “complaint” or “scam”.

Common types of investment scams

Cryptocurrency scams

Cryptocurrencies are digital currencies. Bitcoin is the most well-known form of digital currency. In Australia, cryptocurrency is not treated as ‘money’ or a ‘financial product’ and you have less protection if you invest and it turns out be a scam or you lose a lot of money.

It is very difficult to identify legitimate cryptocurrency investments from scams. Scammers take advantage of the hype and the less regulated environment to ‘invest’ in Bitcoin or another cryptocurrency on your behalf.

Before you invest you should ask yourself if you are willing to lose some or all of the money you have invested and know that if you go ahead you are investing with little or no protections behind you.

Cryptocurrency investment scammers are convincing. They may advertise or post on social media offering great returns from cryptocurrency trading. If you click on the advertisement or post, the scammer will contact you or you will be directed to a fake website. The scammer will offer to make an investment on your behalf, or provide details of an app or website through which you can invest.

Cryptocurrency scammers also commonly use platforms such as Discord and Telegram to contact people.

The scammers will encourage you to buy cryptocurrency through an exchange or request you send money to a company for them to do so on your behalf. They will then claim to either trade on your behalf, or coach you through making trades yourself. You will be able to see the profits you have made on a webpage, app or custom MetaTrader platform.

The data you can see will be fake and will show you profiting (or losing as a way to get you to invest more money). Eventually you will be unable to withdraw any money.

The scammers will make excuses for delays in withdrawals, you are banned from the platform or the trading platform is closed. When you try and find out what has happened, the scammers cannot be contacted and your money is gone.

Unsolicited contacts about investing

A scammer claiming to be a stock broker or portfolio manager calls, emails or contacts you on social media and offers financial or investments advice. They may even claim to be from an investment firm or company you have heard of, as scammers sometimes impersonate these businesses to seem legitimate.

The scammer will claim what they are offering is low-risk and will provide you with quick and high returns, or encourage you to invest in overseas companies.

The scammer's offer will sound legitimate and they may have professional looking websites and resources to back up their claims. They will be persistent, and may continue to contact you until you agree to invest.

The scammer may claim that they do not need an Australian Financial Services licence, or that that they are approved by a real government regulator or affiliated with a genuine company.

The investments offered in these type of cold calls are usually share, mortgage, or real estate high-return schemes, options trading or foreign currency trading. The scammer is usually operating from overseas, and will not have an Australian Financial Services licence.

Romance baiting

The scammer sets up a fake dating profile and will connect with you on a dating website, dating app or social media.

The scammer will ask to continue chatting to you off the dating website or app, typically on a free but encrypted chat site such as WhatsApp, Google Hangouts or WeChat. They may say they want to do this as these chat sites are ‘more private’.

Scammers will make an effort to build your trust and will often do things like express strong emotions for you in a short period of time and share lots of ‘personal’ things with you.

Once they have gained your trust the scammer will tell you about an investment opportunity. Often, they say they have invested a small amount of and made a lot of money very quickly. They will encourage you to initially transfer a small amount of your own money to show how easy the investment is. You may see a quick return. The scammer then encourages you to invest larger amounts.

The scammer will tell you to top up your accounts to increase your profits. If or when you run out of money to transfer or want to withdraw all your funds, the scammer will cease all communication. You will then be unable to obtain your investments from the platform or be told the investment has gone wrong.

Celebrity Endorsement Scams

Scammers use the image, name and personal characteristics of well-known celebrities without their permission, to entice you into investing. Fake celebrity endorsements are often used to advertise scam cryptocurrency schemes.

The way the celebrities’ image is used can take two forms:

  1. An advert might pop up on social media or even YouTube using a celebrity’s image and claiming they endorse or have made a large amount of money from an investment opportunity.
  2. You may see a fake news story about an investment opportunity which appears to be from a well-known media site such as ABC News, The Project and using a celebrity’s image.

The investment adverts or news stories make claims about investment opportunities with huge returns and will typically link to a scam website, often involving a cryptocurrency investment ‘opportunity’.

Ponzi schemes

Ponzi schemes are scams that use funds collected from new investors to pay existing investors. No real investment exists and eventually these schemes collapse.

Scammers contact people on social media and asking them to download or invest through apps. They promise you will see high returns very quickly and you will think you do, but the scammer uses money other people have invested to pay you some return.

Once you have seen a return, the scammer will persuade you to encourage your friends, family and colleagues to invest in the same scheme.

They will pay them ‘returns’ and ask them to recruit people they know into the scheme as well.

Eventually, when the scammer runs out of money or the pool of people being recruited dries up, the scammer will disappear and no one will be able to recover their money.

Share promotions and hot tips

The scammer encourages you to buy shares in a company they predict is about to increase in value. You may be contacted by email, via social media or the message will be posted in a forum. The message looks like an inside tip and will usually stress that you need to act quickly. The scammer is trying to boost the price of stock so they can sell shares they have already bought, and make a huge profit. The share value will then go down dramatically.

If you invest you will be left with large losses or shares that are virtually worthless.

Investment seminars

Investment seminars may be promoted by promising motivational speakers, investment experts, or self-made millionaires who will give you expert advice on investing, with the purpose of convincing you into following high risk investment strategies. These strategies may include borrowing large sums of money to buy property, or investments that involve lending money on a no security basis or other risky terms.

The promoters may charge you an attendance fee, sell overpriced reports or books, and sell investments and property without letting you get independent advice.

If you invest there is a high chance you will lose money.


Superannuation scams offer to give you early access to your super fund, often through a self-managed super fund or for a fee. The offer may come from a scammer posing as a financial adviser. The scammer may ask you to agree to a story to ensure the early release of your money and then, acting as your financial adviser, they will deceive your superannuation company into paying out your super benefits directly to them. Once they have your money, the scammer may take large 'fees' out of the released fund or leave you with nothing at all.

You cannot legally access the preserved part of your super until you are between 55 and 60, depending what year you were born. There are certain exceptions such as severe financial hardship or compassionate grounds - but anyone who otherwise offers early access to your super is acting illegally.

  • If you are under 55, watch out for offers promoting easy access to your preserved superannuation benefits. If you illegally access your super early, you may face penalties under taxation law.

Visit ASIC's MoneySmart for more information about how super works.

Warning signs of an investment scam

  • Promise of low risks with high returns: Always remember, if something seems too good to be true it probably is. If you are promised ‘guaranteed returns’ this is a warning sign.
  • You are contacted out of the blue: You receive a call, email or message on social media from someone offering unsolicited advice on investments.
  • High-pressure tactics: You are contacted repeatedly and are told that you need to act quickly and invest or you will miss out.
  • Remember you have less protections with cryptocurrency investments and scammers know this.
  • Someone you haven’t met in person offers you investment advice: Never take investment advice from someone you meet on social media or a dating app.
  • Use of celebrity endorsements or images: These are usually fake. Celebrities rarely discuss their investments or financial decisions in public.
  • Someone has convincing promotional materials or websites: If documents like prospectuses aren’t registered with ASIC, it is likely part of a scam.
  • You are asked to deposit funds into different accounts for each transaction: Scammers may claim this is for security reasons, or because they are an international company.

Protect yourself

Get professional advice

  • Prior to investing always seek independent legal advice or financial advice from a financial advisor who is registered with ASIC. If it’s a cryptocurrency investment always speak with a qualified legal adviser first.
  • Even if you think you are investing in a well-known company, ask your financial or legal adviser to look at any materials they provide before investing any money. Scammers often impersonate real companies and have convincing sales materials and websites.

Do your research

  • Do not let anyone pressure you into making decisions about your money or investments and never commit to any investment on the spot.
  • Take time to research before investing. You can check who owns a website using search websites such as It’s also a good idea to check whether any account details you have been told to transfer to match the name of the company you are supposedly dealing with.
  • If you feel an offer to buy shares might be legitimate, always check the company's listing on the stock exchange for its current value and recent shares performance. Some offers to buy your shares may be well below market value.

ASIC’s Moneysmart website suggests you undertake the following checks before investing any money:

Ignore unsolicited approaches or advice from people you don’t know

  • Do not give your personal or financial details to an unsolicited caller or reply to emails or messages on social media offering financial advice or investment opportunities - just hang up or delete the email or message.
  • Never take investment advice from anyone that you’ve only met online or provide them with your personal or financial details.
  • Do not send any money to someone you have only met online or transfer money or digital currencies into an investment opportunity suggested to you by someone you’ve only met online.

Have you been scammed?

If you think you have provided your account details to a scammer, or have sent money to the scammer, contact your bank or financial institution immediately to see if the transactions can be reversed and to ensure that no further payments are made to the scammer.

Change your passwords to secure your accounts.

We encourage you to report scams to the ACCC via the report a scam page. This helps us to warn people about current scams, monitor trends and disrupt scams where possible. Please include details of the scam contact you received, for example, email or screenshot.

Scams that relate to financial services can also be reported to ASIC.

We also provide guidance on protecting yourself from scams and where to get help.

Spread the word to your friends and family to protect them.

More information

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