In recent times, Australians fell victim to investment scams totaling a staggering $1.5 billion*. Whether you’re embarking on your journey towards homeownership or envisioning a secure retirement, equipping yourself with the ability to identify red flags and how to avoid scams is crucial for safeguarding your financial resources and future aspirations.
Detecting red flags to avoid scams
1. Unrealistic Promises
Scammers often dangle enticing investments that promise rapid, sky-high returns with minimal risks. These fraudulent schemes frequently involve shares, foreign currency trading, treasury bonds, term deposits, cryptocurrencies, or real estate propositions.
2. Unsolicited Contact
Be wary of unsolicited investment advice from unfamiliar individuals, particularly through social media, dating apps, or unexpected phone calls. Trustworthy advisors build relationships over time.
3. Unconventional Payment Methods
Stay cautious if asked to utilize unconventional payment methods such as cryptocurrencies, gift cards, or Western Union money transfers.
4. Remote Access Requests
Requesting remote access to your devices under the guise of setting up a ‘trading platform’ can lead to the installation of malicious software. Exercise caution with any requested investment app downloads, as they might be counterfeit.
5. Non-disclosure of Internet Banking Details
Never share your Internet Banking login credentials with third parties to prevent unauthorized access.
Safeguard your investments with this Pre-Investment Checklist
1. Verify Licensing
Prior to considering any advice, ensure the individual possesses an Australian Financial Services Licence (AFSL) or Australian Credit Licence (ACL) granted by the Australian Securities and Investment Commission (ASIC). Additionally, confirm that both the company and the investment prospectus are registered with ASIC.
2. Financial Advisers Register
Search the Financial Advisers Register on moneysmart.gov.au for the person’s name to validate their legitimacy.
3. Direct Company Contact
Always reach out to the company through their official website. Criminals frequently masquerade as authentic entities and their employees.
4. Scrutinize Email Addresses
Pay attention to email addresses provided and confirm that they match the registered company’s details. Minor discrepancies, such as a ‘1’ instead of an ‘i,’ can be easily overlooked.
Staying vigilant and informed is paramount in the realm of investments. By recognizing the warning signs and adhering to the pre-investment checklist, you can fortify your financial well-being, know how to avoid scams and shield yourself from falling victim.
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