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Spike in investment scams amid COVID-19, warns ASIC

Adrian Flores
Adrian Flores
24 June 2020 1 minute readShare

The corporate regulator has highlighted a significant rise in scam reports from Australian consumers during the COVID-19 pandemic.

In a statement, ASIC said reports of misconduct it received from March to May 2020 are up by 20 per cent compared to the same period last year.

It noted that the reports of scams it has received indicate that many financial and investment scams have similar traits, whereby scammers often:

  • present a range of investment offers — from modest returns to high returns — that sound safer than they are
  • make persistent requests to continue investing despite no evidence of actual returns on initial investments
  • display fake endorsements from celebrities or government agencies, including ASIC
  • request money be paid to a person or company into multiple or constantly changing bank accounts
  • lure someone via a romance site and direct them to send money or invest in crypto-assets or forex trading

ASIC executive director for assessment and intelligence Warren Day said economic uncertainty due to COVID-19 has created a perfect storm.

“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,” Mr Day said.

“We are seeing a spike in reports of scams related to fake crypto-assets (or crypto currencies), term deposits, investments and scams that start via romance sites.

“ASIC is particularly concerned about the risk to consumers and investors losing money when buying into fake crypto-assets. Most crypto-asset investment opportunities reported to ASIC appear to be outright scams and there is no actual underlying investment.”

Spike in investment scams amid COVID-19, warns ASIC
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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