ASIC sees 200% rise in reports about financial scams in 2021
The Australian Securities and Investments Commission (ASIC) today said it is aware of greater numbers of scammers taking advantage of people throughout the COVID-19 pandemic. Reports of misconduct to ASIC over January/February 2021 are up by more than 200% compared to last year.
Many scammers are sophisticated at creating fake platforms, which often include imposter social media pages, websites, phone lines, fake regulators and stock exchanges. It’s increasingly difficult to differentiate between legitimate companies and scammers.
“Australians are at risk of being scammed and losing money, and scammers are using age-old tactics in new and sophisticated ways to target people,” said Warren Day, ASIC Regional Commissioner for Victoria.
In January this year, ASIC warned of a rise in impostor bond-investment offers. Scammers pretend to be associated with well-known domestic and international financial service firms and offer high-yield bond investments to investors. The regulator has recently become aware of two such scam operations targeting investors in Australia and others in countries such as the UK.
In many circumstances, the scam occurs after the investor completes an online enquiry form expressing interest in receiving investment advice, often via a third party or comparison site.
Fraudulent cryptocurrency schemes have also been a source of concern for ASIC. In January, the regulator issued a warning regarding a suspicious website called Alliance Limited (alliancelimited.org) that is misleading cryptocurrency investors. The page wrongly displays ASIC’s logo to give the impression that ASIC endorses the investment.
The regulator has noted that, during COVID-19, it has seen an increase in reports from consumers losing money in crypto-asset scams. Reports of misconduct received by ASIC from March to May 2020 are up 20% compared to the same period last year.
Investors who have been scammed are typically called or emailed by scammers with an investment opportunity, or approached by their friend, family member, or online romantic partner who tell them how they have made money online and suggests that they try it too. Investors typically sign up to ‘crypto-asset trading’ online and deposit funds into a trading account, either via a crypto wallet or bank account.
When the consumer asks to withdraw their funds, bitcoin scammers either cease all contact, or demand further payment before funds can be released. Often scammers are also seeking to mine personal information from victims to engage in identity fraud.