- In the first half of 2021 alone, investment scams reported to Scamwatch have cost Australians more than $70 million
- Data shows a 53.4 per cent jump in complaints, up from 3104 in the first half of 2020 to 4763 reports so far in 2021
- Particularly concerning is the rise in crypto-based scams, which account for more than half of all investment scams
- Other types of scams, including imposter bond scams, Ponzi scams and romance baiting scams, are also on the rise
In the first half of 2021 alone, investment scams reported to Scamwatch have cost Australians more than $70 million. The figure already exceeds 2020’s full-year tally, and projected losses for this year are expected to reach up to $140 million.
The data shows a 53.4 per cent jump in complaints, up from 3104 in the first half of 2020 to 4763 reports so far in 2021.
Particularly concerning for regulators at the Australian Competition and Consumer Commission (ACCC) is the rise in crypto-based scams.
“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 2240 reports.”
Scammers will typically flaunt what they claim to be highly profitable trading systems based on individual expertise or specialised algorithms they’ve developed. Many of these scams also use fake celebrity endorsements in an attempt to boost their legitimacy.
Victims will initially be able to gain small returns sourced from the deposits of other victims, but the scammers will eventually claim issues with making withdrawals before cutting off all contact.
Losses to investment scams involving bitcoin have already reached $25.7 million this year, compared to $17.8 million throughout all of 2020 — a 44 per cent increase.
“Be wary of investment opportunities with low risk and high returns. If something sounds too good to be true, it probably is,” Ms Rickard continued.
But it’s not just cryptocurrency. Other types of scams, including imposter bond scams, Ponzi scams and romance baiting scams, are also on the rise.
In imposter bond scams, scammers impersonate legitimate companies and offer victims the opportunity to buy fake corporate bonds. In the first six months of this year, there were over 58 complaints to Scamwatch amounting to losses of more than $6.8 million.
“These scams are particularly hard to detect because scammers use the companies’ legitimate prospectuses which are registered with ASIC, link to the actual websites and have the correct ABN/ACN details,” Ms Rickard said.
“However, the scammers change key details such as contact information and bank details.”
When it comes to Ponzi schemes, Scamwatch received more than 400 reports in the first half of 2021 and counted more than $1 million in losses to ploys like the Hope Business and Wonderful World scams.
These used advertising on social media to reel in victims, and disproportionately affected recent migrants and other from culturally diverse backgrounds. According to Scamwatch, 13 per cent of all losses to investment scams — or $9.6 million — were from people who spoke English as a second language.
Finally, and perhaps as a result of continued stay-at-home measures around Australia, romance baiting scams have been on a rapid increase. In these, 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,” Ms 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.”