Cryptocurrency and superannuation investment scams are on the rise, with the Australian Competition and Consumer Commission warning it expects Australians to be swindled out of a record $532 million in all kinds of scams by the end of the year.
Investment scams, such as cold calls from bogus portfolio managers or sham investment seminars, have racked up the highest losses of all scam types, with Australians reporting losses of $37 million so far this year according to the ACCC.
ACCC deputy chairwoman Delia Rickard said investment scams involving superannuation are on the rise.
"I can’t stress enough the importance of safeguarding your super and not listening to any of these scams," Ms Rickard said.
Genuine and fake financial advisers have told victims they can help them access their superannuation early by putting their money into a self-managed super fund.
Under the direction of scammers, victims falsely advise the Australian Taxation Office that they need to access their retirement savings early due to events such as severe financial hardship or terminal illness.
Scammers then trick superannuation funds into paying the victim's money directly to them. The scammers charge an extortion fee to pay the victim their super, or leave them with nothing at all.
Superannuation investment scam victims have been hit with a double-whammy of no retirement savings plus financial penalties for lying to the ATO.
"Taking your money out early and telling lies is actually illegal. You can lose all your money and then pay range of fines as well," Ms Rickard said.
Tallying up all scams reported to Scamwatch and other government agencies, ranging from lottery scams to romance scams, the ACCC expects Australians will lose at least $532 million this year.
With cryptocurrencies coming into the mainstream, Ms Rickard said cryptocurrency Ponzi schemes are also on the rise.
Cryptocurrency scam victims have reported $14.76 million in losses to the ACCC this year, but Ms Rickard said the total damage is likely to be much higher.
Victims start by investing a small amount into the scheme and are rewarded with large, fast returns that they can withdraw as cash. Once their confidence is won over, they invest more and recommend investing to family and friends.
"Then the scheme disappears, the site disappears and the money disappears," Ms Rickard said.
Cryptocurrency investment scams have targeted victims by using false celebrity endorsements on Facebook and Instagram and fake news articles, including multi-billionaire Fortescue Metals founder Andrew "Twiggy" Forrest.
In April, Fortescue issued a public statement that Mr Forrest had never endorsed or invested in cryptocurrencies.
"Such scams are abhorrent and we are doing what we can to try and alert people to them," Fortescue said in the statement.
Preying on the vulnerable
Cyber-security software developer McAfee has detected a rise in the number of malicious cryptocurrency ads online, according to McAfee's MVision Cloud Asia-Pacific regional director Joel Camissar.
"They certainly prey on the vulnerable to get a quick return," Mr Camissar said.
On Friday the ATO issued a warning that at least two SMSFs have lost "significant amounts" of their super by investing in cryptocurrencies.
"Diversify. Don't put all your eggs in one basket," Ms Rickard said.
In July, the ACCC warned at least $16 million had been lost through banking and identity theft scams this year.
The ACCC launched National Scams Awareness Week on Monday in a bid to educate people on how to spot and avoid scams.
“Many people are confident they would never fall for a scam but often it’s this sense of confidence that scammers target,” Ms Rickard said.
By Liz Main
12 August 2019