How to spot and avoid investment scams
Investment scams top the list when it comes to scam losses in Australia. In 2024, reported investment losses have been trending down but remain high, with nearly $80 million lost so far this year according to Scamwatch data.
So, what is an investment scam, and how can you spot and avoid them?
- Unrealistic promises: Be wary of investments that promise guaranteed high returns with little or no risk. If it sounds too good to be true, it probably is.
- Unsolicited contact: Be cautious of unsolicited investment offers, especially those that come through email, social media, or phone calls. Legitimate investment firms typically don't solicit business this way.
- High-pressure tactics: Scammers often use high-pressure tactics to rush you into deciding to invest. This gives the victim little or no time to investigate the legitimacy of the offer.
- Lack of transparency: If the person offering the investment is unwilling or unable to provide evidence that the investment or company is real, then it likely isn’t.
- Unregistered or unlicensed operators: Check if the person or company offering the investment is registered or licensed with the relevant Australian financial authorities, such as the Australian Securities and Investments Commission (ASIC). ASIC’s MoneySmart has an investor alert list which can help you find out which entities are not to be trusted.
- Difficulty withdrawing funds: If you have difficulty withdrawing funds from an investment, it could be a sign of a scam. Legitimate investments should allow you to access your money when you need it.
Community First Credit Union LimitedABN 80 087 649 938 | Operating as Community First Bank | AFSL and Australian credit licence 231204| BSB 512-170