As per latest Scamwatch report, investment scams have become the most significant financial threat to Australians, eclipsing all other fraud types. Offering the allure of high returns with minor risk, these scams are increasingly sophisticated and hard to spot. Scammers employ advanced technology and high-pressure tactics to manipulate victims into making hasty decisions. The urgency created often leads individuals to act quickly, increasing the scammers’ chances of success in stealing money.
Before investing, ensure the individual or company offering financial products holds a valid Australian Financial Services License (AFSL). This licensing is crucial for protection against fraudulent practices. Be especially cautious of offers that seem too good to be true, such as shares sold significantly below market value, as they are likely scams.
To protect yourself and before committing to any financial decision, watch for below warning signs: -
- Fake Endorsements: Misleading ads claiming celebrity endorsements.
- Unfamiliar Friends: Investment pitches from online acquaintances you’ve never met.
- Unrealistic Promises: Emails and ads with exaggerated returns and little risk.
- Pressure Tactics: Rush tactics designed to spur quick decisions.
- License Claims: Advisers who insist they don’t need an AFSL.
- Pyramid Schemes: Requests to promote investments to family and friends for commissions.
If something feels off, seek independent legal or financial advice from a registered advisor with ASIC. For more information on avoiding investment frauds, visit the Australian Government’s Moneysmart website and report any scams to Scamwatch.