Since the earliest days of commerce there have always been people prepared to commit fraud against others. With easy access to millions of people via the internet, modern fraud has increased the opportunities for the bad guys and heightened the risk for the innocent. So we need to protect ourselves against online scams.

Financial scams

We are all interested in making a better return on our investments but who can we really trust?

The Australian Competition & Consumer Commission (ACCC), the government body with a charter to protect consumers, has a most helpful website at www.scamwatch.gov.au with tips to assist Australian small businesses and consumers, and lists of scams they have uncovered.

The federal government has an online service called “Stay Smart Online” at www.staysmartonline.gov.au. You can sign up for the email alerts that provide details of the latest scams doing the rounds and what to do if you are targeted, either online, by phone or via the post.

Watch out!

The Australian Securities & Investment Commission (ASIC) warns that financial scams tend to look realistic and are presented professionally. Scammers often go to a lot of trouble to:

  • print attractive documents and set up a professional looking website;
  • choose names that sound similar to reputable companies or organisations;
  • convince you with a persuasive story using the names of professional brokers or investment managers.

Some of the clues to look out for include offers with a much higher return than genuine investments. Some offer 20% a year, others may go to 200% or even more. Many scams state that financial success is easy and risk isn’t a problem.

Then again it could be a “secret offer”, “inside information” or “new techniques”. There is always some feature to make you feel like you will have an edge over other people. Scams get dressed up as an opportunity and scammers will create a sense of urgency with “don’t miss out”, “act quickly” or, “hurry, before it’s too late”.

The research you need to do

Start your research by first checking if the person or company making the offer is domiciled in Australia and operating under a licence issued by ASIC.

These days, websites are like phone numbers – anyone can have one. Don’t get caught by the unscrupulous. Check with ASIC or myself, a licensed financial adviser before doing anything – or better still, just ignore the “magic offer”. Give me a call if would like to chat about this digital epidemic.

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This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.