“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,” Day says. “ASIC is particularly concerned about the risk to consumers and investors losing money when buying into fake crypto-assets.”
Crypto-currencies are digital or virtual currencies, of which Bitcoin is the best known. Bitcoin came to widespread attention in recent years after some dramatic increases in its value, which landed some Bitcoin investors with windfalls of millions of dollars.
But Day says that the scams ASIC is seeing around crypto-assets involve no actual asset virtual or otherwise, at all. “Most crypto-asset investment opportunities reported to ASIC appear to be outright scams and there is no actual underlying investment,” he explains.
The increase in dubious deals being touted to Australians prompted ASIC to remind potential investors of the similar trains many scams share.
The watchdog says scammers will often present a range of investment options, offering everything from modest returns to high returns, that usually sound safer than they are. This means research into the investment product is key. Scammers also commonly make persistent requests for their target to continue investing despite providing no evidence of real returns on initial investments.
Scammers often display fake endorsements from celebrities or trusted government agencies (such as ASIC) and request money be be paid into frequently changing or multiple bank accounts – money that’s difficult to recover once it is transferred overseas.
Or they approach targets on sites far removed from the investment world, such as dating sites, but then ask their target to send money, invest in crypto-assets or take part in foreign exchange trading (another type of investing that can carry a high risk of loss).
In May, ASIC warned consumers to steer clear of certain fixed-term investment products that were being falsely advertised as low-risk investment options. The products were being marketed as alternatives to government-guaranteed term deposits, which are generally considered to be among the lowest-risk investments available.
The products ASIC cautioned on were far from low risk, however, because they were being offered by companies that generally weren’t as well-capitalised as mainstream banks, and the returns on offer were backed by investment portfolios comprising of mainly higher risk assets.
Australians were cheated out of well over half a billion dollars in 2019. The Australian Competition and Consumer Commission’s Targeting Scams report said Australians lost $634 million last year to scams , $145 million more than they lost in 2018.
“Over the last decade, scammers have taken advantage of new technologies and current scams are using social media apps and new payment methods that didn’t exist in 2009,” ACCC Deputy Chair Delia Rickard says. “In particular, a new trend with…