Don’t fall for slick Investment scams

Miles Harley of ASIC’s Money Smart says detecting dodgy offers can be difficult, but there are a few tricks to help sniff out a scam.

Investment scammers are often slick and difficult to detect, making even the savviest person vulnerable.

Scams come in many different guises, but ASIC senior executive Miles Larbey says there is one golden rule to keeping your money safe.

“If it sounds too good to be true, it probably is,” he says.

According to Mr Larbey, the talents and ploys of professional fraudsters should not be underestimated, especially when saying ‘yes’ to the wrong deal could cost you thousands of dollars.

Guard your information

Never give your personal information over emails or phone calls, advises Mr Larbey.

“This includes your date of birth, bank account details and anything that can be used to perpetrate fraud against you,” he says.

Trusted companies such as banks and financial firms will never ask for this kind of information out of the blue.

It’s not only random strangers

Investment scams can come from someone you know – even someone you’re close to.

When a scam is being offered through someone you trust, it is all the harder to detect.

“Always think hard before you giving away your hard-earned money,” says Mr Larbey.

“We encourage always taking time to think about any offer and to do research.”

The warning signs

A potential scammer is likely to utilise a number of untrustworthy techniques.

“Telemarketing scams often involve long, persistent phone calls,” says My Larbey.

“They will often try to make it hard for you to hang up, or to think about the deal.”

If someone is pressuring you to strike a deal now or risk losing potential profits, it’s very possible they are a scammer.

“Often, these dodgy deals will come out of nowhere, and offer high returns at low or no risk,” he says.

“Sometimes, it’s presented as ‘inside information’, or an advantage over everyone else.”

“There are also a lot of scams offering employment opportunities, or a second income.”

They may be slick

It’s important to remember that shiny brochures and slick websites do not mean you should trust an offer.

Many professional scammers spend money on building polished websites in order to appear respectable.

ASIC’s MoneySmart website has a list of accredited financial firms, plus a list of dodgy dealers you should avoid.

Mr Larbey suggests taking advantage of the sources available.

“It pays to be curious,” he says.

“Especially when many of these scammers operate from overseas, so it’s difficult to track them down.”

If you come across a scam, Mr Larbey recommends you report any details you have to the ASIC website or the ACCC, which also takes these matters very seriously.