Investment scams

Investment scams come in many forms. They are always evolving to cater for emerging technologies and trends. They encourage you, or your business, to enter into a financial opportunity, often too good to be true.

Investment scams will often come from a friend or a financial associate and they will claim a new low risk, high return investment, sometimes based overseas. They might have offered good advice in the past, in the hope of being able to convince you to commit a large sum. They are often persistent, calling you back repeatedly and increasing the pressure on you to agree without giving you the time to independently investigate their claims. All kinds of opportunities can be offered including shares, mortgages, or real estate high-return schemes, options trading or foreign currency trading.

Investment seminars are another opportunity scammers use to encourage you to commit. These seminars will include self-made millionaires as guest speakers and investment experts who pressure you to borrow large sums of money to buy property or investments. These seminars often charge for attendance and sell additional overpriced material such as books and reports on investing. High pressure sales tactics or false and misleading claims are often used to pressure you into investing. They will guarantee rental levels or false discounts for buying off the plan.

Another form of investment scam is one based on sports. The scammer will claim to have perfected a predictive scheme for sporting results, including horse racing. Much of the information that these schemes use is available from your local paper and betting forms.

You could also be encouraged to join a betting syndicate where the joining fee can be exorbitant, with the usual claims of high returns. Any betting is a highly risky ‘investment’ but with a scammer involved, you’re always guaranteed to lose and lose big.

Visit the Australian Securities and Investments Commission’s (ASIC) Moneysmart for more information about investment seminar scams.

Another investment scam is based on your superannuation. Scammers encourage you to release your super early into their control. They then begin to ‘charge’ large fees, rapidly dwindling your life’s savings. Protect yourself by learning more about how your superannuation works at ASIC’s Moneysmart website.

Report all scams to the Australian Competition and Consumer Commission’s ScamWatch website.

If you have incurred a financial loss, report it to your local Police. Please also let us know about the scam here at NT Consumer Affairs on 08 8999 1999 or 1800 019 319 or at consumer@nt.gov.au so that we can warn others.

Warning signs

When considering any investment seek advice from professional, independent financial advisers. Always be wary of these warning signs.

  • You are encouraged to join a risk-free betting syndicate with high returns.
  • Repeated calls offering unsolicited investment advice.
  • Emails from a stranger offering advice in investing in a company.
  • Contacts from ‘friends’ on social media platforms.
  • Seminars and promotions claiming to offer risk-free investment and get-rich quick schemes.
  • High investment seminar fees with additional expenses.
  • Promotions about unlocking your superannuation early.

How to protect yourself

Investment scams cost Australians millions of dollars a year. Don’t become part of that statistic. Always carefully consider and seek professional advice before investing. Don’t fall into the trap of being attracted by get–rich-quick claims.

  • Be suspicious of any investment opportunities that promise a high return with little or no risk.
  • Check if a financial advisor is registered via the ASIC website. Any business or person that offers or advises you about financial products must be an Australian Financial Services (AFS) licence holder.
  • Check ASIC's list of companies you should not deal with. This company list includes companies that have made unsolicited contacts and do not hold a current Australian Financial Services (AFS) licence.
  • Do not let anyone pressure you to invest.
  • Do your own research! Always check the company's listing on the stock exchange for its current value and recent shares performance. Some offers to buy your shares could be well below market value.
  • Conduct an independent check on the company selling the scheme or service - often their postal address will turn out to be a car park and no real office exists. Google street view is a very useful tool for investigating companies.

Last Updated:
18 Dec 2020

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