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Investment scams

Reduce the risk of investment scams

Page reading time: 4 minutes

Be suspicious of anyone offering you easy money. Scammers are skilled at convincing you that the investment is real, the returns are high and the risks are low. There's always a catch.

If you think you’ve been targeted by scammers, act quickly. For steps to take and where to report a scam, see what to do if you've been scammed.

How investment scams work

There are three main types of investment scams:

In any case, the money you 'invest' goes straight into the scammer's bank account and not towards any real investment. It is extremely hard to recover your money if it goes to a scammer based overseas.

Anyone can be scammed and every scam is different. Scams are often hard to spot and can feel legitimate in the moment. Scammers can use professional-looking websites and apps, and impersonate legitimate companies.

Scammers are promoting fake green bonds from well-known companies through social media or on websites.

Green bonds are bonds that are used to finance new and existing projects that offer climate change and environmental benefits. These bonds are not available to the general public or retail investors.

The only way to invest in any green bond investment is through a managed investment scheme.

How scammers contact you

Scammers can come from anywhere. The most common approaches are:

What scammers may offer you

A scammer may tell you they're offering:

How scammers convince you

Scammers will look at the latest investment trends for opportunities. They often use well-known company names, platforms, and terms (such as 'crypto') to lure investors in and appear credible.

This may include fake:

Beware of scammers offering investments or asking for payment using crypto. Crypto-assets (for example, cryptocurrency) are largely unregulated in Australia and are high-risk, volatile investments.

Payments made using crypto are very difficult to trace and recover. To find out more, see cryptocurrencies.

Other tactics used by investment scammers

Operate from overseas

Overseas-based scammers target Australians because ASIC does not have international jurisdiction to prosecute them and they are very difficult to track down. They may ask you to deposit into different bank accounts every time you make a payment.

Investing in overseas companies can be risky. If you invest and something goes wrong, you won't be able to get help from ASIC.

Convincing you not to pull out of the investment

They may try to swap your current investment for another one, convincing you the value will increase, or threaten you with legal action or fees.

A common tactic is to ask for ‘insurance’ or ‘taxes’ before funds invested can be released. This is just another method to extract more money out of victims.

‘Pump and dump’ scams

Scammers use social media and online forums to create fake news and excitement in listed stocks to increase (or ‘pump’) the share price.

Then they sell (or ‘dump’) their shares and take a profit, leaving the share price to fall. Any other investors are left with low value shares and will lose money.

Protect yourself from investment scams

Investment scams can look very convincing. It may be hard to tell if they're genuine investments or not.

Check an investment is legit by following the tips on protect yourself from scams.