How you can avoid an investment trap
Be familiar with the common warning signs to protect yourself against getting caught in an investment scam.
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An RACQ Bank member thought his prayers had been answered when presented with an investment opportunity promising high returns quickly.
The timing was perfect as the member needed extra money to complete work on a property.
RACQ Manager Financial Crimes Taleesha Hamilton said he as promised a ‘risk-free’ investment opportunity but needed to act fast.
“The scammers told our member that they guaranteed he would make the money needed in no time,” Ms Hamilton said.
Despite being warned by the Financial Crimes team that this was most likely a scam, the member was adamant he had done his due diligence.
“Because of the advanced social engineering skills of scammers, people are falling victim to investment scams and are sometimes unwilling to admit that they could be involved in a scam, despite warnings and direct conversations with their bank,” Ms Hamilton said.
Fortunately, the Financial Crimes team recovered the funds ‘invested’ after it became obvious to the member that he was being scammed.
This member’s story is not unusual.
According to the Federal Government’s National Anti-Scam Centre (Scamwatch) more money is lost to investment scams than any other type.
“Members should remember that genuine investment success usually takes time and they should be very wary of schemes promising rapid turnarounds, especially if they seem too good to be true,” Ms Hamilton said.
She said scammers luring investors using fake celebrity endorsements were becoming more common.
“A celebrity investment scam, also known as a ‘deepfake scam’, usually involves a video of a celebrity in which their face or body has been digitally altered to spread false information,” Ms Hamilton said.
“Scammers use deepfake videos of celebrities and public figures claiming to make big profits from online trading platforms and investments.
“The deepfake is successful because consumers believe it to be from a person they perceive as reputable.”
Ms Hamilton said members should seek advice from a qualified financial adviser before investing in any scheme.
Investment scam warning signs
- Fake news stories or ads that claim a celebrity recommends a scheme to make big money.
- An online contact (a friend or romantic interest) that you’ve never met in person starts talking to you about investing.
- Emails, websites or ads with testimonials and over-the-top promises of significant returns.
- High-pressure tactics designed to rush you to act so that you don’t ‘miss out’.
- The ‘adviser’ helping you claims they don’t need an Australian Financial Services (AFS) licence.
- You are asked to promote the scheme to friends and family to earn a commission.
Source: Scamwatch.gov.au
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