Investment scams on the rise, topping $151 million in five months [Advance Cash ]

Investment Scams On The Rise, Topping $151 Million In Five Months

According to data collected by City Index via ACCC's Scamwatch data, Australians lost $151,426,745 to investment scams in the first five months of 2023.

This represents an increase of 180% compared to losses during the same period in 2021, with 844 different investment scams reported.

Investing in cryptocurrency is particularly appealing to Australians, with 78% of reported investment scams related to crypto, according to the ACCC.

With the rapid development of artificial intelligence (AI) tools now available to scammers, as well as the deluge of get-rich-quick schemes on social media, it has never been harder to separate genuine investment opportunities from fraud.

Here are the most commonly reported investment scams:

Fraudulent trading platforms

More than a third (36%) of reported scams involved illegitimate trading platforms.

The scammer sets up a website or app that appears to be a legitimate way to trade, promising investors unique and lucrative opportunities.

They are often extremely convincing, mimicking price movements and showing fake gains.

Matt Weller, head of market research at City Index, recommends skepticism about any unfamiliar trading platform.

“Trade and invest only through reputable and secure cryptocurrency exchanges or crypto-CFD providers,” Weller said.

"Make sure the platform has proper security measures, such as two-factor authentication, encryption, and most importantly, a solid reputation within the crypto community."

Unless covered by an exemption, trading platforms must have a license, usually an Australian Financial Services (AFS) license, so be wary if the site or app you find doesn't seem to do so.

Pig butcher scam

Another 31% of reported scams were so-called “pig butcher” scams.

The scammer builds trust with the victim through social media or dating apps (“fattening up” the pig) before presenting them with fraudulent investment opportunities (the skinning that ensues).

The victim may be directed to illegitimate trading platforms, or the scammer may offer to train them in crypto investing, asking the victim to deposit money somewhere with the promise of large returns.

The pig analogy is brutal, but it's appropriate because these scammers don't just trick you into a quick $400 payment to get a payID transfer down the line; they attack everything the victim has, the “full pig”.

Scammers can build trust over a long period of time, even maintaining the scam after an initial deposit to get more and more money from the victim.

The scammer might reassure the victim that their money is already generating big returns, convincing them to deposit more.

These are particularly malicious because lonely or vulnerable people are most likely to be trapped, but the methods are becoming more and more convincing, catching more and more people.

Imposter scam

The third most common investment scam, accounting for 14% of reported cases, was scammers posing as someone or something legitimate – a company, government official or well-known personality, for example.

The goal is to gain access to the victim's systems and personal information, and steal whatever they can.

Weller says old truisms about internet safety are particularly relevant to protecting yourself from this sort of thing.

"Above all else, you must protect your personal information: never share your financial or personal information, such as bank details or passport information, with unknown or unverified persons or entities," Weller said.

"Never click on unsolicited links or share sensitive information about incoming calls. Instead, the best practice is to manually visit the appropriate website or find the appropriate contact number for the company ostensibly contacting you and make contact yourself."

Stay up to date on the latest scam innovations

The variety of techniques used by scammers is expanding rapidly.

From fake Linkt accusations to allegedly "Mom" texts, these criminals are getting innovative, so it's important to stay on top of everything they come up with next.

Websites like Scamwatch and MoneySmart are regularly updated with information on the latest scams targeting Australians, so it's worth checking back periodically to see what you should be looking for.


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