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Scams and Fraudulent Investment – Protecting Your Wealth
In late 2021, we released an article on our website exploring the story of a client who nearly lost $100,000 to an elaborate and sophisticated scam (click here for that story). That situation, thankfully, ended with nothing more than a near-miss and a lesson learned. However, more recently, another fraudulent investment scam has cropped up, this time taking the money of a client who now faces the prospect of losing that cash for good. This unfortunate situation, while very troubling for the victim, can serve as another reminder about the importance of remaining vigilant in the face of scams. Here are some of the details of what happened, and how to protect yourself and your wealth against fraudulent investments and other scams.
Fraudulent Investment Scam – The Details
The client had engaged with a supposed Investment Management Company in Hong Kong, claiming to deliver multi-strategy portfolios, investing across Asia in “capital markets transactions, engaging with early-stage founders and listed companies on prospective capital raising”. $60,000 USD later (AUD $87,000), it became clear to the client that the company was less than legitimate.
Unfortunately, this realisation came after money had already left their account and made it into the hands of the supposed investment managers, operating in an overseas jurisdiction which adds more layers of complexity to the situation.
Fraudulent Investment Scam – Issues with Fund Recovery
From here, difficulties lie in trying to recover the funds. On some occasions, banks can reverse payments, but this is not always possible, depending on how payments were made. There are also companies that claim to be able to help recover money lost in scams, an avenue this client pursued initially before deciding against it.
Beware of such ‘recovery’ organisations – they can also be scams, targeting and taking further advantage of people who have already lost significant sums of money, and are desperate to get it back however they can. Best practice is to not make any further payments, including those claimed to be for the release or recovery of funds lost through fraud. Engaging the relevant regulatory authorities and reporting the scam, as well as contacting your bank to explore the possibility of transfer reversal, is the optimal place to start.
How to Remain Vigilant Against Scams
There are many things you can do to avoid being the next victim. You can take proactive steps to guard yourself and your wealth against scams and fraudulent investment. The first is to exercise common-sense: if something looks too good to be true, it probably is. Furthermore, if an investment opportunity doesn’t seem right, even if it’s only a minor or trivial thing, trust your instincts. Do not action any transfers until you are 100% confident that it is all above board, and you’ve consulted with a financial adviser to ensure that the investment is in your best financial interests. Establishing an ongoing relationship with an adviser affords you another layer of protection against fraudulent investments and scams, as their knowledge and experience can help to identify them before any money changes hands. The ASIC and ACCC websites have pages dedicated to scam information, you can check those out via the links at the bottom of this article.
How MP+ Can Help
Our Wealth team assist clients with establishing wealth building strategies that are suited to their lifestyle, income, retirement goals, and tolerance for risk. This means not only will our advisers facilitate your investments in a manner suited to you, but it is all done in a regulated, above-board environment that affords you a very high level of protection from fraud and other potential misdemeanours. To find out how we can look after your best interests and help you achieve your financial goals, speak to one of our advisers on 08 9301 2200 or contact us via our website.
ACCC Home | Scamwatch
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