ASIC has warned consumers about the activities of a cold-calling investment scam using the name ‘Global Capital Wealth’.

The scammers offer consumers opportunities to invest in a managed share trading fund.

The scammers operate websites at www.globalcapitalwealth.com and www.globalcapitalaustralia.com which purport to provide share trading services. ASIC has already blocked access to these websites.

ASIC’s concern is that the scammers, via their websites, promotional material and cold calling, appear to be fraudulently using the Australian business number (ABN), Australian company number (ACN) and Australian financial services (AFS) licence number of Global Capital Resources Pty Ltd, a licensed financial services business with no connections to Global Capital Wealth.

ASIC’s investigations indicate that Global Capital Wealth is associated with a group of fraudulent financial services businesses against whom ASIC obtained orders in the Supreme Court of Queensland on 31 October 2012 (refer: 12-265MR). ASIC has previously blocked websites used by these and other related fraudulent financial services businesses (refer: 12-329MR).

ASIC Commissioner Greg Tanzer said investors need to be cautious when offered unsolicited investment advice and products.

‘Consumers can be tempted by the promise of high returns or other incentives, however, they should remember that reputable financial services businesses do not cold call members of the public. If you receive such a call, hang up immediately and save yourself significant potential losses,’ Mr Tanzer said.

ASIC welcomes complaints about any possible scam or illegal investment opportunity.

ASIC’s MoneySmart website has more information about reporting a scam.

Background

ASIC and state and territory police services warn consumers to be alert to investment fraud after an increase in this activity over the last 12 months.

The companies behind these frauds are predominately based on the Gold Coast (although their registered office might be anywhere in Australia) but investors are targeted all over the country.

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 positive returns. However, those returns are completely fictitious. These fraudsters operate without AFS licences and use false addresses and phone lines routed to another address. In the vast majority of cases, investors lose all of their money.

Significant features of this type of scam are:

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

• the promoters 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 investments

• 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 telephoned by somebody trying to sell you a financial product, you should:

• hang up the telephone

• check ASIC registers 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’s too good to be true, it probably isn’t true.