If you receive a phone call or email from someone you don’t know offering you a great investment opportunity, be very wary – it may be a scammer trying to take your money.
Before you invest it’s important to check the list of companies you should not deal with on www.moneysmart.gov.au.
Many scams come from overseas. The scammers target Australians because Australian authorities don’t have international jurisdiction to prosecute them. But ASIC can warn other people about the scam and notify the authorities in the scammer’s country.
Scammers use clever tricks to reel you in. The offers seem genuine but are carefully designed to trick you into giving away your money or personal details.
An offer may be a scam if the person:
- doesn’t have an Australian Financial Services licence or says they don’t need one;
- rings many times and tries to keep you on the phone;
- says you must decide quickly or you’ll miss out on the deal;
- uses the name of or claims to be associated with a reputable organisation to gain credibility;
- offers you glossy brochures or certificates, or directs you to a slick website.
Remember – glossy brochures and professional looking websites are not evidence that an offer is a good investment or even a real deal.
Questions to ask
Ask the person some questions to check their legitimacy:
- What’s your name and what company do you represent?
- Who owns your company?
- Does your company have an Australian Financial Services licence and what is the licence number?
- What’s your address and phone number? (then double check in the Yellow Pages as sometimes scammers try to imitate legitimate companies).
If they avoid answering, it’s probably a scam. Hang up the phone, don’t respond to the email and stop dealing with the person.
If they answer the questions, you still need to do some checks. Check if their name is on the MoneySmart list of unlicensed overseas companies – though remember it’s not a complete list and just because a name isn’t there doesn’t mean they are legitimate. Always check their licence number if they claim to have one. Go to ‘Check ASIC lists’ on the MoneySmart homepage.
Overseas operators can be regulated in their own country. Check on the International Organization of Securities Commissions website, www.iosco.org. Then you can contact the overseas regulator or search its website to see if the company is registered or licensed by them.
How ASIC can help
ASIC wants you to report all investment scams. Even if we can’t prosecute the scammers, we may be able to warn other people.
Generally ASIC won’t be able to help get your money back if you’ve sent it overseas, as the overseas company is outside ASIC’s jurisdiction.
But it’s important to report scams to help stop them spreading – go to www.moneysmart.gov.au for how to report a scam. If you prevent one person from becoming a scam victim, you’re doing your bit to stop scams.
Australian Securities and Investments Commission