Invest wisely – beware of scams
It’s important to watch out for scams, investigate companies before you sign anything and deal only with licensed professionals.
Following are some examples of scams that you might come across.
- Phone scams are unsolicited phone calls to sell you investments, financial advice and financial products. Cold calling about financial products or services is illegal if the caller doesn’t have an Australian financial services licence from the Australian Securities and Investment Commission (ASIC) and only then it is restricted to certain days and certain times of the day.
- Ponzi schemes promise very high returns on a ‘secure’ investment. People who invest early get high dividends and tell their friends to invest as well. These pyramid-like schemes usually fall over when the promoter spends the money too quickly or can’t find more investors.
- Money transfer schemes are usually promoted by email as ‘working from home’ opportunities. They offer you a commission for receiving money into your bank account and transferring it out again. This is known as ‘muling’ and is against the law. The money may be the proceeds of fraud, so people who get involved may be breaking the law.
- Investment seminars claiming a high rate of return that will make you rich quickly should ring alarm bells. Many make money from attendance fees, overpriced reports or books, and from selling investments where they get fees and commissions.
To find out more about get rich quick schemes, seminars and scams, visit www.moneysmart.gov.au.