How to protect yourself from scams
04 October 2021
5
min read
Australians lost around $70 million to investment scams in the first half of 2021, which is more than the total losses for 2020.1 Find out how to stay safe from scams.
A 53.4% jump in reports of investment scams in the six months to 30 June 2021 compared to last year has prompted the Australian Competition and Consumer Commission’s Scamwatch to warn consumers to beware of investment and cryptocurrency scams.
Scamwatch found there were 4,763 reports about investment scams between 1 January and 30 June 2021, up from 3,104 in the first half of 2020.1
More than half of the $70 million in losses were to cryptocurrency, especially through Bitcoin, and cryptocurrency scams were also the most commonly reported type of investment scam with 2,240 reports," ACCC Deputy Chair Delia Rickard said.
Losses to investment scams involving Bitcoin reached $25.7 million in the first six months of 2021, compared to $17.8 million across all of 2020. This represents a 44% increase.
Losses to other types of investment scams, including imposter bond scams, Ponzi schemes, and romance baiting scams also increased.
Reduce your risk of investment scams
The Australian Securities and Investment Commission’s MoneySmart website2 says every scam is different, can be very difficult to spot, and anyone can be scammed.
Investment scam types can include:
- An investment offer that is completely fake
- An investment exists, but the money you give the scammer doesn't go towards that investment
- The scammer says they represent a well-known investment company, but they're lying.
In all cases, the money you 'invest' goes straight into the scammer's bank account and not towards any real investment.
How to spot investment scams
Be suspicious of anyone who offers you easy money.
There are warning signs you may be being scammed. Look out for whether the person offering you an investment opportunity:
- Does not have an Australian financial services (AFS) licence or says they don't need one
- Calls you repeatedly, keeps you on the phone, or emails you a lot
- Demands you make a quick decision, or you will miss out on the deal
- Offers professional-looking prospectuses, brochures, share certificates or receipts, but their prospectus isn't registered with ASIC.
ASIC says if you spot any signs of a scam, hang up the phone or delete the email they have sent you.
If you manage to record any of the scammer's details, report them to ASIC or to Scamwatch.
Source: ASIC, Investment scams, Moneysmart.gov.au
Scams by the numbers
Losses to investment scams in the first six months of 2021 increased by almost 120% compared to the same period in 2020.
Cryptocurrencies were the most common payment method used in investment scams and caused the biggest losses.
Of the 1,931 reports involving a loss, 955 were due to cryptocurrencies causing losses of $29.28 million. Bitcoin accounted for over $25 million of the losses.
Who is being scammed?
Over 65s lost the most money to investment scams in the first six months of 2021, suffering losses of $18.8 million. There were 548 reports from victims of scams in this age groups.1
There was also an increase in the number of people aged 18-24 years who lost money through scams. There was a 66% increase in the number of reports about investment scams from this age group, with reported losses of more than $1.7 million, which is 259% higher than for all of 2020.
Indigenous consumers made 84 reports of investment scams and lost $945,270, which is a threefold increase on the total 2020 figure.
Scamwatch advises to be alert to these investment scams
In imposter bond scams, scammers impersonate legitimate companies and offer victims the opportunity to purchase fake corporate bonds.
In the first half of this year, there were almost 60 reports of imposter bond scams and losses of more than $6.8 million reported to Scamwatch.
In the first six months of 2021, Scamwatch received more than 400 reports and more than $1 million in reported losses to the Hope Business and Wonderful World scams.
The scams advertised on social media sites and had official-looking apps that were available via official app stores.
People invested their money and were able to make small withdrawals, but then the scammers cut off contact.
In romance baiting scams, a scammer develops a relationship with the victim and convinces them to invest, usually in cryptocurrency or bond scams.
Scamwatch said younger people were often victims of these scams as the scammers operated online posting ‘investment opportunities’ on social media. Younger people were also sometimes tempted to register their interest in cryptocurrency on questionable websites.
1. Media Release, 24 August 2021, Australians lose over $70 million to bogus investment opportunities, at scamwatch.gov.au
2. ASIC, MoneySmart, Investment scams, accessed 2 September 2021, at moneysmart.gov.au