Investment scams have cost Australians over $70-million in the first half of this year and projected losses are set to reach $140-million by the end of the year.
The Australian Competition and Consumer Commission (ACCC) says the latest half-yearly figure is more than the total losses reported for all of 2020.
Data from Scamwatch shows a 53.4 percent increase in reports about investment scams received in the first half of 2021 – 4,763 reports versus only 3,104 in the first half of 2020.
“Investment scams are more prevalent than ever, and scammers are capitalising on interest in cryptocurrency in particular,” ACCC Deputy Chair, Delia Rickard, said.
“More than half of the $70-million in losses were to cryptocurrency, especially through Bitcoin, and cryptocurrency scams were also the most commonly reported type of investment scam, with 2,240 reports.”
Scams use fake celebrity endorsements
Scammers pretend to have highly profitable trading systems based on individual expertise or through algorithms they developed. Many of these scams also use fake celebrity endorsements to try and enhance their legitimacy.
Victims will initially be able to access small returns sourced from other victims’ initial deposits, but the scammers soon claim problems with making withdrawals and cut off contact.
“Be wary of investment opportunities with low risk and high returns. If something sounds too good to be true, it probably is,” Rickard said.
Losses to investment scams involving Bitcoin have already reached $25.7-million this year, compared to $17.8-million across all of 2020 – representing a 44 percent increase.
Losses to other types of investment scams – including imposter bond scams, Ponzi scams and romance baiting scams – are also increasing, while traditional investment scams are also still very common.
Romance-related scams are on the rise
Investment scams originating through dating apps and websites are also becoming increasingly common. In these scams, a scammer develops a relationship with the victim and convinces them to invest, usually in cryptocurrency or bond scams.
“These scams predominantly impact younger people, who might be seeing these ‘investment opportunities’ through social media, recommendations from friends, or by registering their interest in cryptocurrency on questionable websites,” Rickard said.
“Remember, never take investment advice, send money or give credit card details, online account details or personal information to anyone you don’t know or trust. And never to someone you have only met online or over the phone, as you never know who you might be dealing with.”