Unwary investor scam rip-off
LAST week the Australian Crime Commission released its report into investment scams.
More than 2,600 Australians may have lost more than $113 million to serious and organised investment fraud in the last five years.
In the report it was highlighted that targets of this type of crime are primarily Australian men, aged over fifty. They are usually highly educated, and have high levels of financial literacy. They are likely to manage their own super it was stated.
The report goes on to to say "The criminal syndicate cold calls the investor, refers them to a flash website and sends them a brochure promising strong investment returns. After taking their money they string them along for months or even years and then the money disappears."
It can often be hard to tell a good investment from a bad one. Promoters can come with convincing sales pitches, and it can be difficult to tell if you're getting sound financial advice.
It seems those old fashion sayings of "what sounds too good to be true probably is" and "the higher the return the higher the risk" have been largely ignored.
The best advice is to hang up on unsolicited calls offering investments as legislation was introduced prohibiting cold calling by licensed financial services companies in 2004.
Before committing to any financial product, you should make sure you have followed the following process.
Firstly, you should seek independent advice. The person providing the advice needs to hold an Australian Financial Services license or be a representative of the firm.
This way you are ensured that you are provided with a range of consumer protection documents, which fully explain the risks. These licensed individuals are required under law to provide advice that is appropriate to you, and fully disclose all fees and charges.
Secondly, it's a priority that the firm promoting the scheme holds an Australian Financial Services License issued by ASIC and this can be easily checked by contacting them or searching ASIC website.