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Investment scam – victim lost $50,000
I was contacted over the phone by an online trader who specialised in binary options, cryptocurrency and forex trading. He said his company was on the cutting edge and used the latest technology and could offer guaranteed returns. I invested a few thousand and used their online platform which seemed to work very well. I could see my trades were resulting in good profits. I invested more at their insistence and they promised I would earn even more. When I wanted to withdraw my money I was told I would need to pay taxes on my profits before I could access it. I was never warned about this but they insisted I needed to pay taxes before I could get my money back. After I asked for my money, my trades started to fail and my accumulated profits were starting to decrease. They pressured me to
invest more so that I could reverse the situation by increasing my ‘trades volume’. They said I would lose everything unless I invested more as an emergency. I feel very embarrassed by this scam, they were very convincing and professional. They stated I would be ‘kicked off the market’ because my trades were failing and I was reduced to 3 per cent of my initial investment but by that point I knew it was all fake.
What were some signs that this was a scam?
- The victim was phoned out of the blue by a stranger offering unsolicited advice on investments.
- The scammer offered the victim ‘guaranteed returns’.
- The scammer encouraged the victim to invest more by promising higher returns.
- The scammer pressured the victim to invest more to ensure he didn’t lose all of his money.
- The victim was told he had to pay additional fees (taxes in this case) to access his money, though he was not informed of this earlier.
What are some things the victim could have done before investing money?
- He could have hung up on the caller and taken some time to think about it, done research and sought trusted or independent financial or legal advice.
- He could have checked on the ASIC website to ensure the business was a registered financial advisor. Any business or person that offers or advises you about financial products must be an Australian Financial Services licence holder. He could have checked ASIC's list of companies you should not deal with.