ASIC: Financial scams up by +200% since the pandemic

Rick Steves

“Australians are at risk of being scammed and losing money, and scammers are using age-old tactics in new and sophisticated ways to target people.”

ASIC has warned of an increasing number of scammers throughout the COVID-19 pandemic. The Australian regulator has registered a 200% growth in reports of financial misconduct over January/February 2021 YoY.

With scammers getting more and more sophisticated at creating fake platforms, the financial watchdog advised investors to be vigilant to imposter social media pages, websites, phone lines, fake regulators, and stock exchanges, although it’s increasingly difficult to differentiate between legitimate companies and scammers.

Warren Day, ASIC Regional Commissioner for Victoria, said: “Australians are at risk of being scammed and losing money, and scammers are using age-old tactics in new and sophisticated ways to target people.”

Financial scammers usually offer a range of investments with modest to high returns, advertised as having little, or no risk at all. Scammers can create emails with logos, text, and phone numbers that look almost identical to those from legitimate organizations.

Scam emails will often try to create a sense of urgency or time pressure to trick victims into clicking on a hyperlink to a fake website. It is good practice to avoid clicking risky hyperlinks by manually searching for the real website, where any real notifications will be available to action.

In 2020, ASIC announced cryptocurrency scams are on the rise. Reports of misconduct received by the regulator from March to May 2020 were up 20% compared to the same period last year.

Investors who have been scammed are typically called or emailed by scammers with an investment opportunity, or approached by their friend, family member, or online romantic partner who tell them how they have made money online and suggests that they try it too. Then investors typically sign up to ‘crypto-asset trading’ online and deposit funds into a trading account, either via a crypto wallet or bank account.

According to data provided by Scamwatch, Australians reported losses of $3.98 million due to investment scams in May 2020. Those over 65 years of age reported the biggest losses, whereas the highest number of reports was submitted by those from 35 to 44 years of age.

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