Protect yourself from investment scams
Common investment scams
Australians are losing more money to investment scams than any other type of scam. These scams are designed to lure you with the promise of high returns with little to no risk. Understand the different types of common investment scams and the warning signs to look out for.
Cryptocurrency scams
Scammers encourage you to invest in crypto assets through fake trading platforms, fraudulent apps or fake websites.
Crypto is hard to track which makes it a perfect option for scammers. Once you invest, your money is typically transferred to the scammer and cannot be recovered.
Example scam
You are offered the chance to invest in a Bitcoin scheme that has 'proven' high returns. You invest, only to discover that the platform you made the payment on was fake, and the Bitcoin scheme never existed.
View tips on crypto scams
Unexpected contact
You are contacted out of the blue about a crypto investment opportunity often via social media or email.
Sense of urgency
Scammers will try to pressure you into acting quickly so you don't miss out on the opportunity.
Too good to be true?
If something seems too good to be true, chances are it is. Always do your research before investing.
Promise of high returns
Scammers frequently promise high returns in a short period of time with little risk involved.
Fake returns
Fake platforms may show fabricated profits to build your confidence to encourage you to invest larger amounts.
Fake websites
Scammers can use professional-looking websites or payment platforms that show false dashboards to appear more legitimate.
Word of mouth
Even if the opportunity is recommended by friends or family, do your own research. Just because a friend has invested, doesn't mean the opportunity is legitimate.
Celebrity endorsement scams
Scammers often use fake celebrity endorsements to make their scheme more appealing. They may even use AI-generated deepfake.
Example scam
A celebrity video appears online promoting an investment that promises huge returns. You invest, only to discover that the video, and the offer, were fake.
View tips on celebrity endorsement scams
Too good to be true?
If something seems too good to be true, chances are it is. Even if a video is viral, always make sure you question if the opportunity is real and crosscheck the information you see with other sources.
No celebrity endorsement elsewhere
Do your research on the celebrity and look at their social media. If there is no information regarding this investment anywhere, it is likely a scam.
Deepfake video - look for glitches
Keep an eye out for instances where the face or head on the video seems to shift, distort or move unnaturally. Deepfake videos can also have mismatched lip-syncing where the audio doesn't perfectly align with the person speaking.
Deepfake video - unnatural facial expressions
Watch closely for any unnatural blinking, eye movement or facial expressions. In deepfake videos, facial expressions may not fully match the emotion being conveyed.
Deepfake video - blurry edges
Look closely at the edges of the face. There may be some blurry edges and distortions where the face meets the background.
Romance baiting scams
Scammers build what seems like a genuine relationship with you online or in-person.
After building trust, the scammer offers an investment opportunity that they claim will bring large returns.
Example scam
Someone you've been speaking with encourages you to invest in cryptocurrency or trading opportunities. After transferring funds, you discover the investment doesn't exist.
View tips on romance baiting scams
Too good to be true?
If the investment opportunity seems too good to be true, chances are it is. Always do your own independent research before making any investment.
Sense of urgency
You may be told the opportunity is limited or time-sensitive to pressure you into acting before you can seek advice.
Request for money
You may be asked to transfer money into unfamiliar platforms, overseas accounts or directly to the scammer so they can 'invest' on your behalf.
Acting as a financial advisor
Do not rely on any financial advice coming from someone you met online especially if they are unqualified to provide financial advice.
Secrecy
You may be encouraged not to tell family, friends or your bank. Genuine investments don't require secrecy.
Real company impersonation scams
A scammer pretends to be from a reputable finance company or bank offering low risk investment opportunities in the form of bonds or loans.
The scammer appears well-versed with financial knowledge and professional-looking documents to convince you that there is a real investment opportunity.
Example scam
You are contacted by someone claiming to be a financial advisor offering a low-risk bond with high returns. After investing, you discover the advisor was not real and the company details were fake.
View tips on real company impersonation scams
Too good to be true?
If the investment opportunity seems too good to be true, chances are it is. Always do your own independent research before making any investment.
Unexpected contact
Be wary of unsolicited contact claiming to be from a financial institution or a financial advisor.
Fake financial advisor
Do not take the advice of a financial advisor that has approached you. Always verify the credentials and licensing of any financial advisor before engaging further.
Fabricated documents
Be skeptical of any documents provided to you. Scammers can create convincing but fraudulent documents to make the opportunity appear legitimate.
Unusual payment methods
Be skeptical of any documents provided to you. Scammers can create convincing but fraudulent documents to make the opportunity appear legitimate.
Contact your bank
Before making any significant investment, speak with your bank or trusted financial advisor. Having another perspective could highlight warning signs.
Ponzi schemes
Ponzi schemes rely on a continuous flow of money from new investors. They involve paying returns to existing investors with the funds gained from new investors and not legitimate profits.
The scheme collapses when new investors slow down, leaving most participants with significant losses.
Example scam
You are told your investment is generating steady returns. In reality, the payouts are being funded by new investors. Once new investors stop joining the scheme, the scheme collapses and all the money invested disappears.
View tips on Ponzi schemes
Guaranteed returns
No legitimate investment can guarantee high returns with no risk.
Unusual payment methods
Be cautious of any requests to transfer money into personal bank accounts, overseas accounts or crypto wallets.
Secrecy
The scammer may insist on you keeping the opportunity a secret to prevent you from seeking independent advice.
Encouragement to recruit
Returns depend on new investors so many Ponzi schemes may encourage you to recruit new investors.
Investments are never guaranteed
Investment scams always promise high returns with little to no risk. In reality, legitimate investments rarely work that way. Even if there is supporting evidence for an investment, keep in mind scammers can go to lengths making an investment seem real.
But who knows how to spot an investment scam? You do. That's who.
Always make sure you do your own research before embarking on any investment. Speak to trusted and reputable financial advisor that is independent to the investment before you commit to anything.
Once you invest in a scam, there is no getting your money back. An outsider perspective can help identify potential warning signs.
Sources
Report a scam or fraud
If you think you've been the victim of fraud or a scam and are worried about your account security, we can help.
The information in this communication is general in nature and is intended to raise awareness about common scam tactics and preventative measures. While the information may assist you in mitigating your risk and exposure to scams and fraud, this is not guaranteed in any way. Examples are illustrative only and are subject to the assumptions and qualifications disclosed. Whilst care has been taken in preparing the content, no liability is accepted for any errors or omissions in this communication, and/or losses or liabilities arising from any reliance on this communication.