These organised criminal groups are located not only in Australia but around the world.
It just so happens that at the time of having this letter given to me by a colleague, I had just read an indepth article on domestic scams in the finance sector in the October 2012 edition of Charter, the professional journal of the Institute of Chartered Accountants in Australia.
These scams have become extremely professional and criminals offering these investment opportunities use persuasive cold calling tactics, sophisticated web sites and legitimate looking brochures.
In fact, they have become so sophisticated that many Australians, including experienced investors who undertake research, have lost their entire retirement savings due to these investment scams.
One area that these criminals are now targeting strongly is the $439 Billion Self Managed Superannuation Industry. The focus for these scammers is promoting the illegal early release of superannuation. This is achieved by encouraging people to rollover their super from an APRA or industry/retail fund into a SMSF - and of course the scammers would take a healthy percentage of the rolled over super amount. Other investment scams promoted include offering over priced Queensland properties to unsuspecting investors - this has been much more prevalent due to changes in recent years which have enabled SMSF borrowing to acquire certain assets, including real estate.
According to a report from the ACC, the most likely victims of an investment scam include:
- Middle aged to older persons (often over 35 years old but usually over 50 years old)
- Small business owners
- Self-funded retirees
- Individuals who have previously made investments in other companies and were considered "financially literate"
- Investors on shareholder registers
- Socially isolated individuals - geographically or otherwise
- Typically educated and computer literate.
The take home message here is always treat an investment provider, particularly those making contact with you by phone or email and you know nothing about, with a high degree of scepticism. Always seek advice from your trusted adviser. In addition, check any credentials with regulators, which means going directly to the sources and government bodies such as ASIC (www.moneysmart.gov.au or phone 1300 300630 ) and the Australian Consumer & Competition Commission to obtain the truth. Further, you can check whether the company or person has a valid Australian Financial Services Licence at www.moneysmart.gov.au.
Better yet, hang up or delete the email - if it sounds to good to be true, it usually is!