September 28, 2020

ASIC News : Australian regulator advises people to be extra cautious

As the confirmed cases of Covid are increasing every day around the world, so are the various trading based scams around the world. Matter of fact the Australian Regulator saw a 20% rise in misconducts in March-May 2020 and even reported about this on their website. A closer look at these scamsters will make you realize there are often some patterns or similar traits in these fraudsters. Reporting and analyzing on these scamsters has led us to identify some of these traits, which the Executive Director for Assessment and Intelligence at ASIC, Warren Day also mentioned in one of his statements recently. Before we look at some of these red flags, it is also important to see who is targeted the most by these scamsters. According to a report by the watchdog group ScamWatch, the senior citizens of our society, who are 64+ years of age, are the most common victims. Given their limited knowledge about the internet, and what is and isn’t shady on the internet, they become highly susceptible to these scamsters. According to the same report, the most number of reported misconducts came from victims in the age of  35-44. These could be your active traders, who are often looking to get first mover advantage and are ready to invest with new brokers. And often these brokers turn out to be scamsters.

Now, lets get on to the red flags that investors should keep an eye out for when trading –

  • The broker offers way too many investment options that have a varied risk portfolio, and they try to push you to choose the “Conservative” option of the choices, making you feel safe that you are investing in the safest option, which they aren’t.
  • Always persuading you to invest more money, while there has been no update about your initial investment. You are told that it was lost, but you have no clear idea, about how that happened; And what will be different this time around.
  • The broker requests payments in different bank accounts, everytime you want to deposit. 
  • Showoff fake endorsements from celebrities, to even regulatory bodies.
  • You met them via a dating site or platform, and now this person wants you to invest in ‘the best investment’ that they have come across.

So, we urge our readers to stay cautious, and scrutinize every detail of a company before you invest with them. Given that almost 4 Million USD was lost to scams in May 2020 alone, or at least that was reported, investors should do their due research. Because as with most things, knowledge is power in this situation.