ASIC has urged consumers to be wary of an unlicensed financial services business purporting to be based on the Gold Coast offering investors returns of up to 50%.

The investment offer involved investors receiving unsolicited telephone calls from persons purportedly representing Dellingworth Pty Ltd offering the opportunity to invest in Australian shares traded by Dellingworth on the investors’ behalf with potential earnings of between 23% and 49% per annum.

Investors were asked to take part in a 7-day, no obligation, free trial with an investment of $1500. Investors who accepted the offer were instructed to deposit their funds into a bank account in the name of Dellingworth Contract and were provided a user name and password which gave them access to their investment account on Dellingworth’s website.

Dellingworth does not hold an Australian financial services (AFS) licence. The addresses of Dellingworth’s registered office, its principal place of business and the residential address of the sole director and shareholder are false. Further, identification documents, presented by the sole director when Dellingworth’s bank account was opened, are also false.

Dellingworth’s website is no longer accessible and calls to its 1300 telephone number are no longer answered.

ASIC Commissioner Greg Tanzer said investors needed to be cautious when offered unsolicited investment advice and making some basic checks could save them a lot of money.

‘I urge potential investors to carefully consider all investment opportunities and seek professional advice before making investment decisions,’ Mr Tanzer said.

Download a public warning notice about Dellingworth Pty Ltd (ACN 131 923 129)

The warning follows ASIC and state and territory police services urging consumers to be alert to investment fraud, having seen an increase in this activity, predominately based on the Gold Coast (although their registered office might be anywhere in Australia) but investors are targeted all over the country.

In February 2012, unlicensed financial planning business Golden Sparrow Pty Ltd was wound up following an application by ASIC to the Supreme Court of Queensland (refer: 12-16AD). In December 2011, a joint operation between the Queensland Police Service (QPS), the Australian Crime Commission (ACC) and ASIC saw multiple search warrants executed across a number of premises and a call centre - including on a company known as West Trade - targeting individuals allegedly involved in investment scams (refer: 11-297AD).

Background

The fraudsters usually contact their victims by telephone and convince them to invest in schemes involving the purchase of shares or investment in index funds or currency trading schemes. Once an investment is made, the fraudsters provide access to a website that shows projected returns, however those returns are completely fictitious. These fraudsters operate without AFS licences and use false addresses and phone lines routed often to another address. In the vast majority of cases, investors lose all of their money.

Significant features of this type of scam are:

• the promoters sometimes adopt the company names of legitimate companies who are licensed to provide financial services

• the scam is supported by sophisticated internet technology including a website which purports to provide investors with real-time information in relation to their trading

• victims are often initially cold called by a person purporting to survey their interest in investing generally

• victims are lured with promises of high returns and then subjected to pressure in order to induce them to hand over their money, and

• when a person falls victim a first time, they are often called back and encouraged to invest in a more sophisticated trading strategy which requires even more money.

If you are suddenly and unexpectedly contacted by somebody trying to sell you a financial product, you should:

• hang up the telephone

• check the ASIC Registers accessible on www.asic.gov.au

  to see if the person or company selling the financial product is licensed or authorised to do so, if not then do not invest

• call the company back using the details on the ASIC register to verify its identity

• if in any doubt contact ASIC on phone 1300 300 630 or visit ASIC’s MoneySmart website, and

• remember if it sounds too good to be true it probably isn't true.