Investment scams

Investment scams can be convincing, sophisticated and difficult to spot. Scammers often promise high returns with little risk, using professional-looking websites, social media ads and even fake endorsements to gain your trust.

Investment scams continue to be one of the most financially damaging scam types affecting Australians, which is why it's important to know what to look out for before investing your money.

What do investment scams look like today?

Scammers are constantly changing their tactics, but they often have one thing in common – they try to create excitement, urgency and trust to get you to part with your money.

Some common types of investment scams include:

Fake investment opportunities

Scammers may contact you about shares, property investments, managed funds, foreign exchange trading or other opportunities that promise high returns with little or no risk.

Pump and dump scams

Scammers promote a share, cryptocurrency or other investment and encourage people to buy in quickly, often using social media, online forums, group chats or ‘insider tips’. As more people invest, the price rises (the ‘pump’). The scammers then sell their holdings at the inflated price (the ‘dump’), causing the value to crash and leaving other investors with significant losses.

Cryptocurrency scams

You may see advertisements, social media posts or websites promoting cryptocurrency investments that appear legitimate. Some scammers create fake trading platforms that show your investment growing, only to prevent you from withdrawing your money later.

Fake celebrity endorsements

Scammers often use images, videos or articles featuring well-known celebrities, business leaders or public figures to promote investment opportunities. These endorsements are often fake or manipulated.

Be wary of anyone offering early access to your superannuation outside of legitimate government-approved arrangements. Scammers may use these offers to access your money or personal information.

While every scam is different, some common red flags include:

• Unsolicited contact via phone, email, text message, social media or messaging apps.

• Pressure to act quickly before you've had time to research the opportunity.

• Promises of high, guaranteed or low-risk returns.

• Sudden hype around a share or cryptocurrency, particularly on social media, group chats or online forums, accompanied by claims that you'll miss out if you don't invest immediately.

• Claims that you're receiving an exclusive offer or insider information.

• Advice to keep the investment secret or not discuss it with family, friends or a financial adviser.

• Fake testimonials, reviews or celebrity endorsements.

• Requests to transfer money quickly, particularly using cryptocurrency or overseas accounts.

• A person or company that can't verify their Australian Financial Services (AFS) licence or authorisation details.

• Professional-looking websites, apps or documents that you can't independently verify.

If you're considering an investment, taking a few extra steps can help protect you from scams.

Treat unexpected approaches with caution

Be cautious of unsolicited investment offers received by phone, email, text message, social media or messaging apps.

Be cautious of online hype

Popularity and excitement don't guarantee an investment is legitimate, and coordinated promotions can be used to artificially inflate prices.

Take your time

Scammers often rely on urgency to stop you from thinking clearly. Never feel pressured to make an immediate investment decision.

Verify independently

If someone contacts you about an investment, independently verify who they are and who they work for using contact details you find yourself.

Be cautious with links

Avoid clicking links in unexpected emails, text messages or social media posts. Instead, visit the organisation's website directly or use trusted contact details to confirm the opportunity is genuine.

Check licences and registrations

Before investing, check whether the person or business is licensed or authorised to provide financial services in Australia and conduct your own research into the investment.

Get independent advice

Consider seeking independent advice from a qualified financial adviser before making significant investment decisions.

If it sounds too good to be true, it probably is

Guaranteed returns, low-risk promises and opportunities that seem unusually profitable should be approached with caution.

A legitimate investment provider should welcome your questions and give you time to do your own research. If you're being pressured, rushed or asked to trust someone without verifying their credentials, stop and take a step back.

When it comes to investing, taking a little extra time to check could help protect your savings from falling into the wrong hands.