ASIC reports doubling of investment scam losses in 2015

Australia financial regulator ASIC has issued its annual Targeting Scams report as part of Australia’s Consumer Fraud Week 2016. The report shows that losses reported to the ASIC’s Scamwatch website from investment scams doubled in 2015.

ASICASIC data indicates that a wide variety of scams, including investment and ‘get rich quick’ scams, continue to hit Australians. Overseas based scammers in particular commonly target consumers in wealthier countries such as Australia. People over 55, many of whom are looking for investment returns in a low interest rate environment, are often most at risk, according to ASIC.

ASIC received 367 reports about scams in 2015, although it believes that the number of actual scams are often under reported. The number of Australians contacted by scammers, and the amounts of money lost, are likely to be much larger than what is reported to ASIC.

In 2015 the top five types of scams reported to ASIC were:

  1. overseas cold calling about investment opportunities,
  2. overseas calls offering easy credit or loans after payment of an upfront fee,
  3. sports arbitrage or gambling schemes,
  4. money transfer schemes (job opportunity or other fraud), and
  5. fake debt and invoice scams.

The scams reported to ASIC generally come from overseas. In many cases the pitch to consumers is so professional, slick and believable that it is hard to tell these are not genuine financial opportunities. Scammers have sophisticated sales practices that include call scripts, false paperwork, fake websites and made-up referees.

Typically, investment and financial scams will offer:

  • High, quick returns and sometimes tax-free benefits.
  • Big rewards for what seems a small upfront payment.
  • Discounts for early bird investors.
  • ‘No risk’ or ‘low risk’ investments, where ‘you can sell anytime’, get a refund for non-performance or have ‘guaranteed’ transactions.
  • Inside information or the opportunity to invest before a public float.
  • ‘Magic’ software that claims to predict sporting results or promises to makes you rich through active share trading.


ASIC advises that the best thing to do if you are cold called about an investment is to hang up. If you do have concerns, consumers should ask the person offering the investment these questions, to check their legitimacy:

  • What is your name and what company do you represent?
  • Who owns your company?
  • Does your company or scheme have an Australian Financial Services Licence (ASFL) or an Australian Credit Licence (ACL) and what is the licence number? Check this number on ASIC’s Professional Registers.
  • What is your address?

Investors can protect themselves against investment scams by:

  • Always taking time to consider investment opportunities.
  • Checking ASIC’s MoneySmart website for the list of companies you should not deal with. If the company that called you is on the list – do not deal with them.
  • Checking the company’s listing on the stock exchange for its current value and recent share performance as some offers to buy shares may be well below market value.
  • Checking the company is real by calling their publicly listed phone number.
  • Getting a second opinion from a licensed financial adviser.

For more on ASIC’s Targeting Scams click here.

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