Investment scams set to double in 2021

0

Must know

  • Investment scams come in many forms, but cryptocurrency scams are the most common
  • People aged 65 and over were the group that lost the most to investment scams in August this year
  • People aged 18 to 24 reported losses of $ 1.7 million to ACCC in August – a 259% jump from all of 2020

Australians lost over $ 851 million to scams in 2020 – the worst year on record – and it looks like 2021 will be another banner year for scammers.

Topping the list this year and last year are investment scams.

In 2020, Australians lost $ 328 million to investment scams, as reported to ACCC and other government agencies, banks and payment platforms. In the first half of this year, $ 70 million in losses from investment scams were reported to ACCC’s only scam monitoring platform, and that figure is expected to double.

Once figures from other government agencies, banks and payment platforms are compiled at the end of the year, it is likely that investment scam losses will set a new record.

The most common form of contact for investment fraudsters was by phone, followed by mobile apps and social media sites.

In August 2021, people aged 65 and over had lost the most money to investment scams ($ 18.8 million) reported to ACCC so far this year. But the losses of $ 1.7 million among those aged 18 to 24 is a 259% jump from 2020 as a whole.

Indigenous consumers reported losses of $ 945,270 in August, a three-fold increase from the $ 336,796 in losses reported to ACCC last year.

The most common form of contact for investment fraudsters was by telephone, followed by mobile apps and social networking sites.

Cryptocurrency leads the way

“More than half of the $ 70 million in losses [reported to the ACCC this year] were into cryptocurrency, particularly through bitcoin, and cryptocurrency scams were also the most commonly reported type of investment scam, with 2,240 reports, ”said the vice president of the ‘ACCC, Delia Rickard.

A typical cryptocurrency scam starts out as a pyramid scheme, with victims being lured by internet crooks claiming to have developed highly profitable trading systems based on special algorithms. Many scammers also throw out fake celebrity mentions.

More than half of the $ 70 million in losses were attributable to cryptocurrency, particularly via bitcoin, and cryptocurrency scams were also the most commonly reported type of investment scam.

Vice-President of ACCC Delia Rickard

At first, victims will receive small returns on their investments that come from the initial deposits of other victims. But then the crooks will say they have some problem with the system, cut off the ignition and keep the money.

By the end of August, losses due to investment scams involving only bitcoin had reached $ 25.7 million, as reported to Scamwatch, compared to $ 17.8 million for all of 2020.

Impostor bond scams

Older Australians looking to park their savings in bonds lost an estimated $ 6.8 million to corporate bond scams in the first half of 2021, according to ACCC reports.

In these types of operations, the crooks pose as legitimate businesses.

Scammers use legitimate prospectuses from companies that are registered with ASIC, link to actual websites, and have the correct ABN / ACN information.

ACCC Vice-President Delia Rickard

“These scams are particularly difficult to detect because the crooks use legitimate prospectuses from companies that are registered with ASIC. [Australian Securities and Investments Commission], a link to the actual websites and correct ABN / ACN information, ”says Rickard.

“However, the crooks change key information such as contact details and bank details.”

Almost half of the losses were from bogus bond sales for well-known and respected companies. ACCC’s opinion? Find the contact details of the company yourself and check if the sale of the bond is legitimate.

Ponzi schemes

The old Ponzi scheme (where existing investors get paid with funds raised from new investors) is still a popular tactic among crooks, who typically use social media these days as their preferred tool to lure victims.

Two Ponzi schemes in particular, the Hope Business and Wonderful World scams, were responsible for over $ 1 million in losses as of August 24 of this year and have been the subject of over 400 reports to the Scamwatch reporting service. ACCC.

Victims were invited to invest their money via apps and could initially make small withdrawals … then the crooks cut off all contact

Victims were invited to invest their money through apps and could initially make small withdrawals from other people’s deposits. Then the crooks cut off all contact.

After ACCC’s intervention, the Hope Business app and the main Wonderful World app were removed from the Google and Apple app stores.

This Ponzi scheme has disproportionately affected members of culturally and linguistically diverse communities (CALDs), including recent migrants from Burma and Sri Lanka.

(Overall, about 13% of the losses, $ 9.6 million, due to investment scams came from people whose first language is not English.)

Romantic investment scams

Romantic scams from dating apps and websites can turn into another kind of investment scam.

In this case, the scammer will cultivate an online relationship with the victim and end up saying that they are experiencing a great investment opportunity, usually involving cryptocurrency or bonds. But of course, this is just a ruse to part with your money and then turn off the ignition.

It’s a trick to part with your money and then cut the contact

“These scams primarily affect young people, who might see these ‘investment opportunities’ through social media, referrals from friends or by registering their interest in cryptocurrency on questionable websites,” Rickard said.

The way to avoid romance scams is to never take investment advice, send money, give credit card details, online account details, or personal information to someone you don’t know. not or who you don’t trust – which should generally include anyone you’ve only met online or from above. the phone.

What to do if you think you’ve been scammed

  • Contact your bank or financial institution immediately and change your bank details if they fall into the wrong hands.
  • Contact IDCARE at 1 800 595 160 or at idcare.org if you believe you have been a victim of identity theft. (IDCARE is a free service funded by the government.)
  • Report scams to ACCC’s Scamwatch.

Have you been the victim of a scam? We are interested in hearing your story. Please contact us at [email protected]


Source link

Leave A Reply

Your email address will not be published.