Investment scams are a global issue. They are present on all continents. Every nation has had its fair share of them. From fake investment opportunities to Ponzi schemes, they vary. Recently, fake exchanges or trading apps have made the headlines.
Investment scams work because they’re luring. Usually, scammers promise investors high returns and low risks, which is a paradox. There is no such thing as a 100% safe investment. Yet, many people invest based on emotions instead of logic. Hence, fraudsters and con artists make huge profits.
Australia has also seen many investment scams. In recent years, their number increased. In fact, scams have skyrocketed worldwide since 2020. The pandemic gave rise to more internet scams. These were more successful as more people engaged in remote activities. So, there were more potential victims available.
As the ACCC’s Scamwatch report shows, Aussies reported over 20,000 scams only in February 2021. These amounted to losses of over $21 million. In conclusion, this was one prolific month for scammers. And the following were similar. This year, the trend seems to follow the same path. Read on and discover how Australians are losing more money in scams. Then, learn how to stay safe.
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The Most Popular Scams
According to ACCC’s report, some of the most popular scams in 2021 were investment scams. However, online dating scams were also at the top. Vaccine scams followed them. All these scams ramped up in the context of the pandemic.
The prolonged lockdowns kept people at home. Many devoted time to investment strategies. Hence, related scams proliferated. Others were eager to find love. And this was no longer possible in person. So, dating apps boomed. But along with them, so did online romance scams. Then, there were also vaccine scams. These are self-explanatory. In the beginning, getting a vaccine was not easy. People had to wait for months for their turn to immunization. But scammers were tricky. They conned people by promising faster access to vaccines.
Australians lost more than $4 million only in online love scams. These dating or romance scams usually occur on dating apps. The applications themselves are not responsible. It is the users who con other users. Romance scams are evergreen. However, before the internet era, they took place in person.
The author carefully searched for victims. Usually representatives of the upper class, people with money. Then, they gained their trust. Finally, they asked for money and got it. And in the end, they vanished. Internet romance scams follow the same pattern, but in the online environment.
ACCC’s report also included remote access scams. These internet scams led to a $2 million loss. The trick behind them is ransomware. Scammers use different tools to access computers remotely. Then, they ask for ransom. In exchange, they won’t hack the victims’ devices anymore. They will also allow them to access their PCs again.
Now, these scams deserve a chapter all to themselves. Why? Because they were the most prolific scams targeting Aussies in 2021. These led to a total loss of approximately $10 million in January 2021. The following month, the same type of scams generated $8 million. This is still a significant amount. These scams are particularly dangerous. Many people invest their savings in fake investment opportunities such as Ponzi schemes. Then, they end up losing all. And unfortunately, many times, fraudsters get away with crime. Novice and enthusiastic investors are the best prey. This is because they rush to invest. Instead of taking time to do research first.
To avoid such scams, it’s essential to do prior research. You should know where your money goes. For example, in what account, in what country. You should also make sure you invest through a legally registered company. Especially if you use trading platforms and brokers. If you partner with a personal broker, check their credentials. If you see an investment advertisement, be cautious. Don’t create an account by clicking on the ad. Search for the company’s official website. And only invest after you’ve read more about it.
Look for its physical address, registration data, terms and conditions, and contact information. A legitimate company’s website should contain all these details. You shouldn’t put your money in someone else’s hands unless you feel safe. And details such as missing contact information or no T&C page should make you skeptical.
For the past two years, the increased use of online technologies and remote work prompted scams to succeed. Spending more time online means exposing yourself more to scams and hacks. The only way to avoid them is to be cautious. Never fully trust an email or text from unknown senders. Always do your research before signing up, paying for a service, or even helping someone. Especially if the entire communication takes place online. Also, be wary of investment opportunities promising huge returns.
News article by Clearwater Management.