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Investment scams on the rise during COVID-19

— 1 minute read

The corporate watchdog has warned consumers and investors to be on alert after recording a 20 per cent rise in investment scam reports during the coronavirus pandemic. 

Reports of the misconduct received by ASIC from March to May are up by a fifth year on year. 

ASIC executive director for assessment and intelligence Warren Day said economic certainty due to COVID-19 has created a perfect storm. 

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“Australians are at risk of being spammed and losing money and scammers are using age-old tactics in new and sophisticated ways to target people,” Mr Day said. 

“We are seeing a spike in reports of scams related to fake crypto-assets (or crypto currencies), term deposits, investments and scams that start via romance sites.

“ASIC is particularly concerned about the risk to consumers and investors losing money when buying into fake crypto-assets. Most crypto asset investment opportunities reported to ASIC appear to be outright scams and there is no actual underlying investment.”

ASIC stated scammers are difficult to catch and lost money can be difficult to recover, particularly when they are operating outside of Australia. 

Reports of scams received by the regulator have indicated that scammers will often present a range of investment offers that sound safer than they are, make persistent requests to continue investing despite no evidence of actual returns on initial investments and display fake endorsements from celebrities or government agencies (including ASIC).

They can also request money to be paid to a person or a company into multiple or constantly changing bank accounts and lure someone via a dating site and direct them to send money or invest in crypto-assets or forex trading.

A recent report from the ACCC revealed Australians were swindled out of $126 million through investment scams last year.

 

Investment scams on the rise during COVID-19
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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