Investment schemes involve getting you or your business to part with money on the promise of a questionable financial opportunity.
Common types of investment scams
Investment cold calls
A scammer claiming to be a stock broker or portfolio manager calls you and offers financial or investments advice. They 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 resources to back up their claims. They will be persistent, and may keep calling you back.
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 operating from overseas, and will not have an Australian Financial Services licence.
Share promotions and hot tips
The scammer encourages you to buy shares in a company that they predict is about to increase in value. You may be contacted by email or the message will be posted in a forum. The message will seem like an inside tip and 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 are promoted by promising motivational speakers, investment experts, or self-made millionaires who will give you expert advice on investing. They are designed to convince you into following high risk investment strategies such as borrowing large sums of money to buy property, or investments that involve lending money on a no security basis or other risky terms.
Promoters make money by charging you an attendance fee, selling overpriced reports or books, and by selling investments and property without letting you get independent advice. The investments on offer are generally overvalued and you may end up having to pay fees and commissions that the promoters did not tell you about. High pressure sales tactics or false and misleading claims are often used to pressure you into investing, such as guaranteed rent or discounts for buying off the plan.
If you invest there is a high chance you will lose money.
Visit ASIC's MoneySmart for more information about investment seminar scams.
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 financial adviser, or a scammer posing as one. 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.
Visit ASIC's MoneySmart for more information about how super works.
- You receive a call, or repeated calls, from someone offering unsolicited advice on investments. They may try to keep you on the phone for a long time, or try and transfer you to a more senior person. You are told that you need to act quickly and invest or you will miss out.
- You receive an email from a stranger offering advice on the share price of a particular company. It may not be addressed to you personally, and may even give the impression it was sent to you by mistake.
- An advertisement or seminar makes claims such as 'risk-free investment', 'be a millionaire in three years', or 'get-rich quick'.
- You are invited to attend a free seminar, but there are high fees to attend any further sessions. The scammer, posing as the promoter, may offer you a loan to cover both the cost of your attendance at the additional seminars and investments.
- You see an advertisement promising a quick and easy way to 'unlock' your superannuation early.
- Do not give your details to an unsolicited caller or reply to emails offering financial advice or investment opportunities - just hang up or delete the email.
- Be suspicious of investment opportunities that promise a high return with little or no risk.
- Check if a financial advisor is registered via the ASIC website. Any business or person that offers or advises you about financial products must be an Australian Financial Services (AFS) licence holder.
- Check ASIC's list of companies you should not deal with. If the company that called you is on the list - do not deal with them.
- Do not let anyone pressure you into making decisions about your money or investments and never commit to any investment at a seminar - always get independent legal or financial advice.
- Do not respond to emails from strangers offering predictions on shares, investment tips, or investment advice.
- 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.
- Never commit to any investment at a seminar - always take time to consider the opportunity and seek independent financial advice.
- 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.
Have you been scammed?
If you think you have provided your account details to a scammer, contact your bank or financial institution immediately.
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.
Spread the word to your friends and family to protect them.