Is it too good to be true? How to look out for a scam

"Instead of showcasing the challenges of women as a group, I look to help each woman as an individual with a plan that is right for them."
-Katherine Hann
October 10, 2017

Is it too good to be true? How to look out for a scam

By Katherine Hann

Is it too good to be true? How to look out for a scam

We’ve all heard stories of the elderly being tricked out of their savings, but data from Scamwatch confirmed that in 2017 the group to lose the most money to investment schemes is the 55-64 age bracket .

Investor scams, although not the most common type, produced some of the greatest losses:

Since the beginning of 2017, Australians have lost over $19million to this category, and $4.8million of that is from the Baby Boomer generation. Men have
been scammed out of more money, with 67% of the total amount lost coming from male investors.

The most common types of investment scams include:

Cold calls share, mortgage or real estate high-return options or foreign currency trading.

Hot tips – encouraging purchases of shares in a company that is ‘guaranteed’ to increase in value.
The victim is encouraged to act quickly, but the scammer is either selling shares that have no real value, or has obtained rights to the shares via
a hidden clause.

Investment seminars – scammers convince investors to buy into high risk investment strategies with no independent advice. Often they are not licensed advisers. You may end up having to pay high fees and commissions that the promoters did not tell you about, or you could
simply be buying something that is not worth as much as they say it is.

Superannuation scams – offering early access to funds held in superannuation accounts. Super funds
can only be accessed when a specific condition or release is met and these conditions are legislated.

Remember, red flags are your friend and if in doubt just say ‘no’. A genuine professional would not resort to high pressure sales tactics and must give you full disclosure of any fees
before giving advice.

It is important to obtain advice from a licensed professional, so do be sure to ask the person giving advice what their qualifications are and how they
are licensed.

It is also best to see a finance professional in person if possible, and ensure that they ask all relevant information about you to understand your specific
financial situation, needs, and objectives before acting.