Investment and romance scams – more than heart-breaking

6 Jan 2021

No matter whether you’re looking for love, or you’d love an investment that sets your pulse racing, think with your head not your heart. Plenty of Australians get stung by scams involving dodgy investments and fake romances.

The idea of getting rich quick appeals to all of us. Investment scams play on that. Each year Australians lose around $132 million to investment scams, but there are telltale signs to look for.

The most obvious is a call or email from a complete stranger pitching an investment offering big returns at low risk.

It can all sound too good to be true. That’s because it is. In reality, there is no investment, and if you hand over any cash, chances are you won’t see the money (or the scammer) again.

If you have doubts, ask the caller for their Australian Financial Services Licence (AFSL) number. That can send them running. If it doesn’t, check any number they provide on the Australian Securities and Investments Commission website to see if it’s fake.

Above all, don’t hand over a cent. Keep personal details to yourself too. Scammers can use these to steal your identity.

I just want your money, honey

When it comes to romance scams, scammers take psychology to the next level, messing with their victim’s heads and hearts – and swindling Australians out of around $83 million annually.

Along with traditional online dating websites, romance scams can appear on platforms like Instagram, Facebook and Tinder4. But just like investment scams, there are signs to watch out for. Romance scammers start by building your trust, and often declare strong feeling at an early stage. It’s all very flattering, but the red flag is that they come up with all sorts of excuses to avoid meeting in person.

The real clincher is when the scammer asks for money. It may be to help a sick relative, or pay for an airfare to meet you in-person. Don’t be fooled. These lame excuses are designed to tug at your heart strings (and open your purse strings). Don’t get caught in a bad romance. How do you know if someone you meet online is genuine or a cyber crook? The Australian Cyber Security Centre offers some tips:

• First, do an online image search to see if the scammer has pinched pics of another person. Scammers usually create fake profiles or take the identities of real people.
• Look for inconsistencies in their story. They may say they’re a professional from Australia working overseas, yet have very poor English skills.
• Even if you meet someone who seems legit, be wary about giving out personal details like your last name, phone number and where you live or work. Try to arrange a face to face meeting in a safe, public place at an early stage.
• Be suspicious if you get repeated excuses about why the person can’t meet you face-to-face. And when requests for money start rolling in, it’s time to delete all contact.

A healthy dose of skepticism can help keep you and your money, safe from online fraudsters.

This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.