Scams Week: How a $52,000 investment scam was thwarted – and how to spot one
According to the ABS, around 65% of Australians have been exposed to a scam. 2.5% have responded to a scam.
The theme for Scams Awareness Week 2024 is 'Share a Story, Stop a Scam'.
Why? Well scams aren't like fraud, they require humans to fall for them. So, the more scam stories out in the open, the fewer people fall for them (hopefully).
This week, ANZ is sharing its stories with Finder of some of the times where it has prevented scams.
Here's a story about an investment scam:
A customer walked into an ANZ branch wanting to send $50,000 to a cryptocurrency account for investment purposes via their credit card.
The payment was detected and flagged by ANZ's Falcon team, which detects and prevents fraud and scams. The transaction was considered a high-risk payment thanks to the amount but also the destination account.
ANZ's Falcon team got in touch with the customer who said he had engaged with a broker who was referred to him by a friend. The broker was helping him invest in cryptocurrency.
The customer was referred through to the scams department as the Falcon team was concerned he was being scammed.
The customer was adamant he wanted the payment to be processed and was very unhappy that ANZ stopped the payment.
Scam Assist decided to block the card payments, preventing a loss of $52,000.
How people fall for investment scams
ANZ says that generally with investment scams the customer finds out about the company via an ad on social media or when searching for investment opportunities online. They may also be enticed to invest when in a romance or friendship scam.
The scammer will often coach the customer to mislead the bank about how long they have been trading or to tell the bank that no third party has helped with their investment.
The investment will usually seem too good to be true with the promise of high returns. But customers will only realise they have been scammed once they request to withdraw their funds from the cryptocurrency account. The scammer then becomes uncontactable.
Money may even go through a legitimate trading platform first, but will be onforwarded to third party wallets or platforms.
If it can get worse, it's also common for these scams to be followed up by a recovery scam. This is where a scammer contacts the customer saying they are lawyers and can help them recover the funds they lost to the original investment scam.
How to spot an investment scam
Investment scammers are developing more sophisticated methods and go to great lengths to sell you on the legitimacy of the investment.
For example, they might supply brochures and account statements, direct you to professional looking websites and even staff call centres.
"Scammers are experts at using emotional triggers to manipulate people into sending money – for example creating a sense of urgency, excitement or fear to impair the victim's rational thinking," Ruth Talalla, scams portfolio lead at ANZ, explains.
This is why it's so important to stay alert for red flags that might suggest something dubious is afoot:
- Being contacted out of the blue by a "financial expert" offering to take your savings and grow them exponentially.
- Getting harassed by the person encouraging you to invest, with constant contact or pressure to commit before you hang up the call.
- Offering returns that are better than the average interest rate on term deposits or bonds.
- Promises or guarantees that the investment is extremely 'low risk' or 'no risk'.
- Attempts to avoid official channels or claims they don't need to officially register the investment.
- If the 'adviser' is unable to provide their registration with the Australian Securities and Investments Commission (ASIC) or their Australian Financial Services (AFS) licence.
- They insist on dealing with you only over phone or online and refuse to meet in person.
- Celebrity endorsements – these can easily be faked using artificial intelligence.
- Newly registered companies or websites.
"A legitimate financial adviser will be registered with ASIC, have an Australian Financial Services Licence or Australian Business Number. A legitimate advisor will also allow you to take your time to make a decision, rather than adopt high pressure sales tactics to rush you into making one," Ruth says.