A report published by the Australian Competition & Consumer Commission (ACCC), a competition regulator in Australia, highlighted a sharp rise in the amount of money lost to investment scams during the first half of 2021.
The report stated that investment scams reported to Scamwatch lost Australians more than $70 million during that period, more than the total losses for 2020. Projected losses are forecast to hit $140 million by the end of 2021.
The numbers show an increase of over 53% in reported investment scams received in H1 2021, from 3,104 in 2020 to 4,763 this year.
One of the reasons for the rise is that scammers are capitalising on the interest in the cryptocurrency market, with more than half of the $70 million loss due to crypto scams and 2,240 of the 4,763 reports put down to crypto scammers.
ACCC Deputy Chair, Delia Rickard, warned:
Be wary of investment opportunities with low risk and high returns. If something sounds too good to be true, it probably is.
Bitcoin scams are a significant issue in the country, with losses to investment scams involving Bitcoin reaching $25.7 million this year, compared to $17.8 million during the whole of 2020, a rise of 44%.
Other scams included imposter bond scams where fraudsters impersonate legitimate businesses, offering customers the option to buy fake corporate bonds or to invest in Ponzi schemes. The ACCC has stated it received over 400 reports of Hope Business and Wonderful World scams.
Some 40% of all investment scams that involved a financial loss involved mobile apps and social networking websites. That may go some way in explaining the 66% increase in the number of reports made by people aged 18 to 24 years old.
The ACCC commented:
“These scams used advertising on social media sites and had their applications available via official app stores. People invested their money and were able to make small withdrawals in the beginning before the scammers cut off contact.”
The ACCC reached out to the Google & Apple apps stores to ensure the Hope business app was removed alongside the Wonderful World fraudulent app.
Having gained a degree in economics, Alan entered the world of financial services starting his career in London and then moving to New York for a number of years. His first post at a City bank saw him establish a reputation as an forex trader. Having recently returned from New York after eight successful years, Alan is now a prosperous trader in his own right concentrating on commodities and forex.