“These scams are very sophisticated and the scammers are very convincing. People aged 45–64 are most at risk and make up more than half the reports sent to Scamwatch,” Rickard added. “Scammers will spend significant time and effort grooming their victims to invest. They will use the right technical language and also offer professional looking websites and documents to convince victims they are legitimate. It’s often only when people try to cash out their investment that they realize their money is gone.”
Cryptocurrency Trading Scams Now Second Most Common In Australia
Scamwatch, a website run by the Australian Competition and Consumer Commission (ACCC), has reported that the Australian community is collectively losing $4.3 million a month to investment scams, including binary options and cryptocurrency trading scams.
The entity revealed that over $26 million has been lost to investment scams already, which is 84 percent of the total losses recorded in 2017.
Delia Rickard, Deputy Chair at the ACCC, commented:
“The losses to investment scams are horrific. Each week the ACCC receives heartbreaking accounts of people losing hundreds of thousands, and in some cases millions, of dollars. Last year, Australians reported they lost $64.6 million to investment scams to Scamwatch and the Australian Cybercrime Online Reporting Network (ACORN). If the current trend continues, combined losses reported to Scamwatch and ACORN in 2018 could be in excess of $100 million.”
Still centered on traditional investment markets like stocks, real estate or commodities, the vast majority of investment scams include cold call victims claiming to be a stockbroker or investment portfolio manager and offer a ‘hot tip’ or inside information on a stock or asset that is supposedly about to go up significantly in value.
Cryptocurrency trading scams have grown significantly in the past 12 months and are now the second most common type of investment scam offer pushed on victims. Binary options scams are very common as well.
“The rise in popularity in cryptocurrency trading has not been missed by scammers who are latching onto this new trend to con people. These are similar to any other investment scam: the scammer will claim to have inside knowledge about price movements they will use to make you a fortune. If you invest, your money will quickly disappear.”
“Binary options trading involves scammers pretending they can predict the movements of a commodity, asset or index prices over a short time. They direct you to a website with a login, account details and a trading platform. They appear to put your money into the account and demonstrate a number of successful trades to encourage you to invest greater sums. Then your money begins to disappear and so too does the scammer”, Rickard continued.
Scamwatch explained to inexperienced investors that the clearest warning sign of an investment scammer is how they contact victims, especially vial cold calls, emails, and text, with promises of a risk-free investment, low risk and high return, as well as ‘be a millionaire in three years‘, or ‘get-rich quick‘.
“If you’re searching for new investment opportunities online, don’t always trust what you read. It’s easy for scammers to create professional looking investment websites”, the ACCC Deputy Chair added.