'Risk-free investment' or opportunity for misfortune?
How the scam works:
Investment scams come in many forms including business ventures, superannuation schemes, managed funds and the sale or purchase of shares or property. Scammers dress up 'opportunities' with professional looking brochures and websites to mask their fraudulent operations. They often begin with a phone call or email out of the blue from a scammer offering a 'not-to-be-missed', 'high return' or 'guaranteed' opportunity. The scammer usually operates from overseas, and will not have an Australian Financial Services licence.
Computer prediction software scams promise to accurately predict stock market movements, the results of horse races, sports events or lotteries. They are simply a form of gambling disguised as investments. Most of the schemes or programs do not work and buyers cannot get their money back. In many cases the supplier simply disappears.
Superannuation scams offer to give you early access to your super fund, often through a self-managed super fund or for a fee. The scammer may ask you to agree to a story to allow the early release of your money and then, acting as your financial adviser, they will deceive directly to them. Once they have your money, the scammer may take large 'fees' or leave you with nothing at all.
- Dont let anyone pressure you into making decisions about your money or investments - espcially if the offer has come out of the blue.
- Before parting with your money, do your own research on the investment company and check out www.moneysmart.gov.au to see if they have an Australian Financial Services Licence. Ask yourself: if a stranger knew a secret to making money, why would they share it?
If you are under retirement age, watch out for offers promoting easy access to your preserved superannuation benefits. If you illegally access your super early, you may face penalties under taxation law.