Investment scams reported to Scamwatch have cost Australians over $70 million in the first half of this year, more than the total losses reported to Scamwatch for all of 2020. The projected losses are set to reach $140 million by the end of the year, according to the Australian Competition and Consumer Commission (ACCC).
Data from Scamwatch shows a 53.4% increase in the number of reports about investment scams received so far, up from 3,104 in the first half of 2020 to 4,763 reports so far in 2021.
In addition to taking victims’ money, scammers often commit fraud or identity theft using the information they obtained from the victim.
“Investment scams are more prevalent than ever, and scammers are capitalising on interest in cryptocurrency in particular,” ACCC Deputy Chair Delia Rickard said.
“More than half of the $70 million in losses were to cryptocurrency, especially through Bitcoin, and cryptocurrency scams were also the most commonly reported type of investment scam, with 2,240 reports.”
Scammers pretend to have highly profitable trading systems based on individual expertise or through algorithms they developed. Many of these scams also use fake celebrity endorsements to try and enhance their legitimacy.
Losses to investment scams involving Bitcoin have already reached $25.7 million this year, compared to $17.8 million across all of 2020, representing a 44 per cent increase.
Losses to other types of investment scams, including imposter bond scams, Ponzi scams, and romance baiting scams are also increasing, while traditional investment scams are also still very common.
In imposter bond scams, scammers impersonate legitimate companies and offer victims the opportunity to purchase fake corporate bonds.
In the first half of this year, there were over 58 reports and losses of more than $6.8 million reported to Scamwatch.
Ponzi schemes have also increased. In the first six months of this year, Scamwatch received over 400 reports and more than $1 million in losses to the Hope Business and Wonderful World scams. These scams used advertising on social media sites and had their applications available via official app stores. People invested their money and were able to make small withdrawals in the beginning before the scammers cut off contact.
Investment scams originating through dating apps and websites are also becoming increasingly common. In these scams, a scammer develops a relationship with the victim and convinces them to invest, usually in cryptocurrency or bond scams.
The ACCC is urging everyone to seek independent advice from a qualified financial advisor before making any investments.