$5 million financial year loss for WA victims of investment scams

A wide variety of investment scams have claimed 65 victims in WA so far this financial year with losses totalling $4,983,000 being reported to WA ScamNet at Consumer Protection.

The victims responded to cold callers, emails and enticing advertisements on social media making false claims of low risk and high returns. The bogus investments being offered included shares, foreign exchange, binary options and cryptocurrencies.

Several advertisements used the stolen images of celebrities and prominent businesspeople to give the impression of authenticity. Some recent victims reported meeting the scammers via dating websites and apps and were presented with an ‘investment opportunity’ after an online relationship was established.

Similar losses were reported last financial year with 63 WA victims losing a total of $5.9 million.

Commissioner for Consumer Protection Lanie Chopping said, with the average individual loss of about $77,000, the financial impact on victims is substantial.

“If someone’s telling you about a way to make easy, fast money and putting significant pressure on you to invest big with a promise of high returns, be sceptical and discuss it with someone you trust,” Ms Chopping said.

“The investment scams are backed up by clever salespeople who use hard sell tactics and fake evidence of high returns to get people to part with their money.

“Professional looking fake websites and personal online accounts showing a growing balance are often used to make the investment look legitimate.

“It’s not until the investor asks to withdraw money that there is any indication that it’s a scam and a variety of excuses are used as to why withdrawals can’t be made. However, in a few cases, the scammers allow for small amounts to be returned, hoping that greater confidence from the victim will result in more money being invested in the future.

“Promoting investments in Australia is a strictly regulated activity, so investors should only deal with companies and agents that are registered with ASIC so do a search on their website which also has warnings about companies to avoid.

“Sometimes the identity of legitimate traders are stolen along with their ABN and registration details. So independently contact the business to confirm that you are dealing with the real one before transferring any of your money and get advice from licensed financial advisors.”

Tips to avoid investment scams

  • Don’t respond to emails and phone calls from strangers offering predictions on shares, investment tips or investment advice.
  • Be suspicious of offers to sell you shares, cryptocurrency or a chance to take part in Binary Options Trading, especially if the ‘company’ is based overseas.
  • Do your own research before you invest and do not invest what you cannot afford to lose.
  • If someone’s telling you about a way to make easy, fast money and putting significant pressure on you to invest big with a promise of high returns, ask yourself “is it too good to be true?” and discuss it with someone you trust.
  • Carry out thorough research before investing money and get independent financial advice from a licensed financial advisor – see ASIC’s Financial Advisers Register.
  • Check ASIC’s MoneySmart website to see a list of companies you should not deal with.

You can get help to verify investment offers by contacting WA ScamNet on 1300 30 40 54 during office hours or report an investment scam on the WA ScamNet website.

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