Scamwatch warns investment scams can start in chat groups, referrals and fake news stories

Scamwatch has published an alert about investment scams that don’t look like a sales pitch at first. It describes three common starting points:

• Group chats. People are added to a messaging group about a hobby or shared interest. Someone presenting as an investment expert then promotes a trading platform, and other members post fake profits. Scamwatch says the platform may show gains, but withdrawals bring demands for extra fees or taxes.
• Referrals from people you trust. Friends or relatives may pass on an opportunity without knowing it’s a scam, sometimes for a commission. Some of these are Ponzi schemes that pay early investors with newer investors’ money until they collapse.
• Fake news articles. Scammers copy the look of real media sites to claim a platform is approved or endorsed, or use made-up celebrity stories.

Warning signs Scamwatch lists

Pressure to act quickly, invitations to chat groups that lead to investing, celebrity “news” linking to an investment, returns that are high, guaranteed or unusually steady, requests to recruit friends for commission, and fees or deposits demanded before a withdrawal.

What Scamwatch says to do

Scamwatch’s steps are Stop (don’t rush to send money or share details), Check (confirm on ASIC’s register that the person holds an Australian financial services licence, and confirm they work for the organisation they name, using contact details you find yourself) and Protect (stop paying, contact your bank straight away, and report the scam).

Our guide to how investment scams work covers these patterns in more detail, and money recovery scams explains a follow-up scam that can come after an investment scam. Scams can be reported to Scamwatch.