The holiday season can be a time of increased or irregular spending. With gifts, travel and events, many people may feel a financial pinch. This could make the idea of quickly earning back some of that money very appealing, which is exactly what scammers are counting on.

Investment scams often promise high returns with little to no risk, preying on our desire for financial security. This article aims to help you understand how these scams work, what to look out for, and how to protect your hard-earned money.

 

How Investment Scams Work

The money you "invest" in a scam goes directly into the scammer's pocket, and it is extremely difficult to recover, especially if they are based overseas.

There are three common ways these scams operate (amongst others):

  1. The offer is completely fake. The investment opportunity they present simply does not exist.
  2. The investment is real, but that’s not where your money goes. Scammers might pretend to offer a legitimate investment but will keep any money you give them instead of investing it.
  3. They impersonate a real company. Scammers may say they work for a well-known, reputable company to gain your trust, but they are lying.

 

How Scammers Contact You

Scammers can reach you through various channels.

  • Unexpected Contact: You might get a call, email, or social media message out of the blue. They might even pretend to be from your financial institution, offering an exclusive deal.
  • Fake Websites: Scammers create convincing websites that look like real investment firms or news outlets. They might even use the logos of government bodies to appear credible.
  • Social Media and Ads: You may see paid ads in your social media feeds or at the top of search engine results. They also use deepfake videos of celebrities endorsing fake investment programs like "Quantum AI" to lure people in.
  • Dating Apps: Some scammers use dating apps to build a relationship with you before suggesting a seemingly great investment opportunity.

 

Stop, Check, and Protect

Before you even consider putting your money into an investment, especially one that came to you unexpectedly, consider these steps.

Step 1: STOP and Spot the Signs

The first and most important step is to pause. Scammers want you to act quickly without thinking. They create a sense of urgency to rush you into a bad decision.

Be alert for these common red flags:

  • Promises of guaranteed or high returns. All investments carry some level of risk. Anyone who guarantees a return is likely not being honest.
  • Pressure to invest immediately. Don't fall for "limited-time offers" designed to make you act fast.
  • Unsolicited offers. Be very cautious of unexpected contact regarding an investment. Ask yourself why they are contacting you with this offer.
  • Requests for payment in cryptocurrency. While crypto is becoming more common, most legitimate financial firms in Australia will not ask you to pay for an investment using it. Crypto payments are very hard to trace and recover.

Step 2: CHECK the Details

Doing your own research is crucial. Do not rely on testimonials or a professional-looking website alone.

  • Search the Investor Alert List. ASIC maintains a list of suspicious companies and websites. If the name is on this list, do not engage with them.
  • Read the offer documents. Legitimate investments will have a Product Disclosure Statement (PDS) or a prospectus. Read it carefully to understand the key features, risks, and fees.
  • Use independent verification. If a scammer is impersonating a real company, contact that company using phone numbers or email addresses from their official website, not the ones provided by the potential scammer.

Step 3: PROTECT Your Money and Information

Knowing your rights and how to protect yourself could save you from financial loss and stress.

  • Only deal with licensed providers. When you invest with a licensed Australian provider, you have better protections if something goes wrong, including access to free dispute resolution services.
  • Be wary of unregulated products. Investments like crypto assets or direct purchases of precious metals are often not regulated by ASIC. This means you have fewer protections if things go wrong.

 

What to if You Suspect a Scam

If you think you've been targeted by a scam or have already lost money:

  1. Contact your bank immediately. If you have made a payment, your bank may be able to stop the transaction or recover the funds. If you are a Queensland Country Bank Member and are in doubt about a transaction, contact us on 1800 075 078.
  2. Report the scam. You can report scams to Scamwatch, which helps track scam trends and warn others.
  3. Change your passwords. If you have shared any personal information, change the passwords on your online accounts to help prevent further unauthorised access.

 

Are you a victim of an Investment Scam?

Many people who have fallen victim to an investment scam desperately seek ways to recover their lost funds - scammers exploit this vulnerability. Learn more about investment recovery scams.

Stay vigilant and take the time to stop, check, and protect.

 

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