ASIC has issued a warning to people living in regional centres about investment frauds, as evidence mounts that mining communities around Australia are being targeted.
ASIC has received preliminary information to suggest that mining communities and regional centres associated with major resource projects are being targeted by people touting illegal, high-risk investment schemes.
The Executive Director of Consumer Protection at ASIC, Greg Tanzer, said the thriving natural resources industry was attracting the interest of investment product providers.
‘The strong demand for Australia’s natural resources means there is more work and higher earnings. It’s only natural that people with a bit more cash in their pockets start thinking about investing. The real danger is when they get a phone call, investment offer or email hot tip out of the blue, offering something that looks like a good investment’, Mr Tanzer said.
Typical investment frauds include:
- fraudsters posing as overseas-based stock brokers and investment advisers, selling worthless shares;
- home-grown illegal investment schemes promising high returns and ways to avoid tax; and
- phoney ‘hot tips’ being emailed about little-known and thinly-traded US stocks.
‘Don’t kiss your money goodbye. Money attracts swindlers, so it’s essential to stay on guard. Deal only with businesses that hold an Australian financial services licence. That way, you’re much better protected if something goes wrong.’
‘Let’s not repeat the mistakes of the dot-com share market boom when thousands of Australians lost more than $500 million overseas in worthless shares sold by cold callers. Also steer clear of illegal investment schemes - they’re another recipe for financial disaster. A properly run investment scheme will generally be registered with ASIC, and managed by a public company holding an Australian financial services licence.’
Licence details, investment scheme registrations and information about scams and illegal investments can be checked, free of charge, on ASIC’s consumer website FIDO