Monday, 03 September 2012 02:46

New Warning - Serious Investment Fraud

Fraud

The Minister for Home Affairs and Minister of Justice Jason Clare today urged Australians to protect themselves against the growing threat of serious and organised investment fraud.

Minister Clare released a new report from the Australian Crime Commission (ACC) and Australian Institute of Criminology (AIC) which provides a national picture of the nature and threat of serious and organised investment fraud in Australia.

“This is the first unclassified report of its kind. It indicates that more than 2600 Australians may have lost more than $113 million to serious and organised investment fraud in the last five years. That number could be even higher because people tend not to report this kind of crime,” Mr Clare said.

“The 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.

“This is what happens. 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.

“People’s entire life savings are stolen by criminals with the click of a mouse. This type of crime destroys wealth and destroys lives. It’s also very difficult to stop.

“These criminal syndicates usually operate from outside Australia. They use front companies and false names. Once they’ve stolen the money the website disappears and the trail goes dead.”

In the next two months every household in Australia will receive a letter warning them about this criminal activity and providing information on how to avoid becoming a victim.

This is the first time Australian law enforcement agencies have undertaken a mail out of this scale regarding serious and organised crime.

“This problem is not going away. Australia’s retirement savings are growing – making us a bigger target every year,” Mr Clare said.

ACC Chief Executive Officer Mr John Lawler said the level of superannuation and retirement savings in Australia made it an attractive target for organised crime groups.

“To combat this growing threat, last year the ACC Board established multi-agency Task Force Galilee to disrupt and prevent serious and organised investment fraud and harden Australians against this type of organised crime,” Mr Lawler said.

“These scams are typically unsolicited ‘cold calls’ used alongside sophisticated hoax websites to try and legitimise the fraud. This type of crime targets the life savings of hard working Australians. Australian and international law enforcement partners stand committed to protecting Australians from these crimes.”

Australian Securities and Investments Commission Chairman, Greg Medcraft said fraudulent investments are incredibly sophisticated and very difficult for even experienced investors to identify.

“Perpetrators of this type of fraud are skilled at using high-pressure sales tactics, over the phone and using email, to persuade their victims to part with their money,” Mr Medcraft said.

“I urge investors to be immediately wary if they are called at random by someone offering an investment opportunity overseas.”

Australians should take the following actions to prevent becoming victims of investment fraud:

  • Visit www.moneysmart.gov.au or call 1300 300 630 for further information or advice.
  • Alert your family and friends to this fraud, especially anyone who may have savings to invest.
  • Report suspected fraud to the Australian Securities and Investments Commission, on www.moneysmart.gov.au or 1300 300 630, or your local police. Remembering information such as company name, location and contact details will assist with subsequent investigations and enquiries.
  • Hang up on unsolicited telephone calls offering overseas investments.
  • Check any company you are discussing investments with has a valid Australian Financial Services Licence at www.moneysmart.gov.au
  • Always seek independent financial advice before making an investment.

To access the report on Serious and Organised Investment Fraud in Australia see the ACC website www.crimecommission.gov.auor visit www.moneysmart.gov.au or call 1300 300 630 for further information and to report suspected investment fraud.

Warning letter that was sent to all Australian households

Media contact:  Annie Williams - 02 6277 7290

Published in Investment Advice