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Number of investment scams soars during COVID pandemic

By Neil Griffiths
 — 1 minute read

ASIC has revealed that the number of investment scams reported during the COVID-19 pandemic has “increased dramatically” since pre-pandemic.

In its quarterly update released on Wednesday, the corporate regulator reported that in early 2021 it received almost 10 times the amount of misconduct reports compared to the pre-pandemic average. 

It is believed the increase in scams is due to more people spending time online during lockdowns, while over 75 per cent of reports were related to crypto-assest scams.

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“During this quarter we maintained our ongoing commitment to protecting consumers, as set out in our Corporate Plan 2020-24,” a statement by ASIC in the update read.

“We accounted for the heightened vulnerability, elevated debt levels and increased hardship experienced by Australians during the pandemic. In April and May 2021, we commenced civil penalty proceedings against financial services companies for alleged breaches of laws we administer.

“Our Scams Working Group continued to monitor and identify scams, and published warnings and alerts. Meanwhile, our Enforcement teams took swift action against wrongdoing.

“ASIC’s efforts using new regulatory tools were tested in the courts, with our first product intervention order upheld by the Full Federal Court in June 2021.”

The two NSW-based companies – SA Services and Orphans Asia – were wound up following a scam investigation launched by ASIC. 

In January, ASIC issued a warning for Australian consumers against sophisticated bond scammers who were swindling “not thousands, but millions of dollars”.

 

Number of investment scams soars during COVID pandemic
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