Struck by a smooth criminal

3 min read

You wouldn’t hand over your money to just anyone. Of course not! The truth is though, sometimes scammers can seem legit and know just what to say and show you to break down your barriers. 

Better technology means they are getting better at it and the Australians who lost a combined $23.6 million to investment scams in 2016 would testify to it1.

So how can you protect yourself from a slick scammer?

To start with, it helps to understand how you could be scammed and what type of scams there are.

According to the Australian Securities and Investments Commission (ASIC), there are three main types2.

1. Fictional investment offer

Much like it sounds, the scammer will try to get you to invest in something that doesn’t exist and just take your money. They try to get you in the door by making the investment sound amazing. Maybe it offers unbelievable dividends. Maybe an astronomical growth rate. You probably won’t find this ‘great deal’ advertised anywhere and your bank is unlikely to know about it (unless the scam has already been alerted). In some cases, the scammer might have made a slick looking website to try and lure you in the door.

2. Real investment offer – but your money doesn’t go there

The scammer will contact you about a genuine investment – for example, an IPO, and offer you their own way to access it. Or offer you a limited time discount to access the investment. They are likely to pressure you on the spot to purchase, without giving you time to think. While it will appear like your money is going towards that investment, it’s just headed straight into the scammer’s bank account. A recent example of this is Australian Emirates Media in 2016 which had a software subsidiary called ToLinkIn which claimed to offer investors foreign exchange trading software using a Hong Kong bank for money transfers. It offered a smooth web experience to lull investors into a false sense of security – but successfully took their money instead3.

3. Fake claims to represent a well-known company

The scammer may just lie – or they may have a company that uses a name close to or identical to a reputable business to trick you into thinking they are one and the same. They might have slick websites and brochures too. For example, it has become fairly common to see emails claiming to be from your bank these days.

Prevention is better than a cure

The first thing to be aware of is that scammers are likely to contact you out of the blue. It could be a phone call or an email but it is unlikely to be one you’ve been expecting. They will probably also inundate you with calls and emails, almost to the point of harassment (before they vanish).

Once you get scammed, it’s very unlikely you’ll see your hard-earned money again – especially given many scammers are based overseas and can’t be prosecuted by Australian authorities4. So the key here is prevention.

So what can you do?

1. If it sounds too good to be true, it probably is.

If someone is promising you large returns that you couldn’t easily earn elsewhere, think carefully – how are they actually able to generate those returns? Something to keep in mind is Australia has strict rules around promoting returns for investments so if someone is making big promises, they might not be genuine.

2. Do your research

Get on google and look up the products. Ask for their ABN and Australian Financial Services Licence (AFSL) – and be concerned if they don’t have this. Check the ASIC website ( for lists of scam companies, and also check in with Scamwatch ( If someone rings you or emails you claiming to be from a well-known company, look up the contact number for the company on your own and call them to check in (scammers are likely to give you a number directly to them and the address for a website that might look genuine so ignore these initially just in case).

3. Reputation might be worth the price

If the investment is genuine – but you’re not sure the person offering it to you is – it is worth looking at investing through companies that you know are reputable and have the correct licensing to offer you the investments. This way, you have more certainty that you are investing in the product you actually wanted, rather than filling a fraud’s pockets.

4. Diversify and start small

Even genuine investments have risks and it’s worth spreading your money across a variety. Think the old adage about eggs in one basket – if you are going to lose money, you don’t want it to be everything. Some Australians have lost their entire savings in investment scams – a pretty frightening situation to be in.

5. Financial advice

If you aren’t sure about an investment, it might be worth speaking to a licensed financial adviser for help. Your friends or family might be your normal go-to people for help but that doesn’t mean they can give you the right financial advice for you. As awful as it is to think about, many Ponzi schemes have relied on family and friend relationships to build up their investor base and seen them all lose money. A financial adviser can help you work out if an investment is genuine as well as whether it is likely to be suitable for your financial needs and goals.

Think you are getting called by a scammer?

Make sure to report it so you can help prevent someone else being scammed – you should also follow this step if a scammer has taken your money.

You can report scams to Scamwatch at

You can verify contact from BT Financial Group by calling us on 132 135 – you can also report any scams purporting to be BT by emailing us at

Contact us or talk to a financial adviser.

1. ACCC Report – Targeting Scams: Report of the ACCC on scams activity 2016, May 2017
2. ASIC Moneysmart 
3. Boiler room scam victims unlikely to get money back, police warn, ABC News, 4 February 2016
4. ASIC Moneysmart

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This information is current as at 12/07/2017.

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