Investment scams cost Australians millions of dollars each year. The cost of living crisis is pushing people to reduce their spending and find other ways to cover expenses which can leave them open to investment scams. These scams often promise big returns with typically minimal effort and can be tempting when people are experiencing hard times.
So, how do you avoid investment scams in Australia?
Investment scams prey on your trust in online connections and desire to grow your wealth. Some scams appear promoted by celebrities, or by your social media friends, and ask you to invest into a wealth-growth opportunity, such as cryptocurrency or gold. Most of these promotions are too good to be true, and are fabricated with fake endorsements to persuade you into handing over money that you likely won’t see again.
Common types of investment scams include:
A survey commissioned by the Customer Owned Banking Association (COBA) showed more than four-in-five investors were confident they could identify an investment scam, regardless of their level of experience.
However, less experienced investors were twice as likely to use online forums and social media as a trusted source to verify an investment opportunity. This is a risky strategy as fraudsters and ‘finfluencers’ frequent these sites too and can easily share information. Finfluencers are social media influencers that provide trading, investment or financial advice, which they are not always qualified to do.
Amongst more experienced investors there is a misconception that investing in bonds is low risk, however according to a recent Scamwatch article imposter bond scams are a significant issue.
Scammers encourage individuals to register their name, mobile number and email on a fake website. They then steal money by getting people to buy fake investment bonds. The National Anti-Scam Centre are working closely with the Australian Securities and Investment Commission (ASIC) to remove investment scam websites, which led to thousands of websites being taken down in 2024.
According to Scamwatch statistics, of the $192m lost they reported to investment scams in 2024, over half of the losses were reported by people over the age of 55. Common methods of contact were phone calls (40%), social media (37%) and email (22%).
In positive news, Australian reports of investment scams are down 14.6% in 2024 vs. 2023 (6861 vs 7412).
Always check if a financial advisor holds an Australian Financial Services Licence by searching the ASIC website.
Check ASIC’s list of companies you should not deal with. If the company that contacted you is on the list – do not deal with them. Even if they are not on this list, it could still be a scam. The MoneySmart website also contains information about how to avoid investment scams.
Do your homework on the investment by running a company search online for any reviews, complaints or scams.
Heritage Bank will never contact you to request your current passwords, card details, verification, access, or SMS passcodes, or to move money from your account. If you’re unsure of an email, SMS or phone call is real, please contact us directly before actioning. Find out more about how we protect our members from scams.
If you think you have been a victim of a scam it’s important to call Heritage on 13 14 22 (available 24/7) promptly to limit any further loss and to see if the transactions can be reversed or disputed. If you are overseas please call +61 7 4694 9000.