What are investment scams?
Overall losses from investment scams reported to the National Anti-Scam Centre’s Scamwatch, ReportCyber, IDCARE, ASIC and the Australian Financial Crimes Exchange amounted to $945 million in 2024, down from $1.3 billion in 2023. These figures demonstrate the size of the investment scam challenge and harm to Australians.
How you can avoid an investment scam
You can protect yourself, family and friends by remembering these three simple steps. Stop. Check. Protect.
Stop before you act
If an investment offer seems too good to be true, stop to consider, could this be a scam? Criminals will often make the offer seem urgent and pressure you into making fast decisions, but you can take your time before you act.
Check before you share
Before handing over personal information and money, check with the company directly using their official, publicly listed contact details. Also check with the Australian Securities and Investment Commission (ASIC) to see if the person providing advice has an Australian Financial Services Licence (AFSL) or Australian Credit Licence (ACL). You should also check whether ASIC has a record of the company and their investment prospectus being registered.
Protect if you suspect
Acting quickly if something doesn’t feel right goes a long way in helping to protect your money and information. If you think you’ve been scammed, call us on 13 22 65 and ask for our Fraud team.
Spot the red flags
How to spot the red flags of investment scams
Investment scams might take different forms. Here are some of the most common:
- You receive a call, social media message or email from a ‘financial advisor’ associated with a well-known financial planning company, offering an amazing investment opportunity. These investment opportunities may involve shares, real estate, term deposits, bonds, mortgages, options, foreign currency trading, or crypto currencies and many more. You investigate the company, and it’s registered on ASIC and other government websites. The ‘financial advisor’ emails you a prospectus. However, the ‘financial advisor’ is impersonating someone working within the firm and the official documents of the company. On closer inspection, you discover the email address of the real financial advisor is slightly different and the information provided to you was false.
- You receive a call or email from a ‘financial advisor’ offering amazing investment opportunities with high returns and a low risk. In reality, this ‘advisor’ is unregistered and intends to steal all the money you invest.
- You’re encouraged to invest in cryptocurrency promising quick and high returns by an ‘investment advisor’ or a ‘romantic partner’. An account is set up in your name, which holds your invested crypto and ‘password’. In reality a criminal holds your cryptocurrency in an account they have control of and steals the funds from you.
- You see a social media post or a message about making money through a new investment opportunity or cryptocurrency. This post may be by a well-known celebrity or sent directly by an ‘investment advisor’ or ‘romantic partner’, or even a close friend. In reality, the investment is worthless and set up by criminals to steal your funds. Criminals may have hacked your friends’ accounts to send these messages too. It’s also rare for celebrities to endorse any kind of investment opportunity.
- You’re invited to download an app promising high returns for investing funds. The apps often encourage people to sign up friends and family for further commissions, and complete in-app tasks to increase their returns. Two known examples are “Hope Business” and “Wonderful World”.
- Someone offers to help you recover funds for an upfront fee. This is called a ‘funds recovery scam’.
Report fraud
Learn how to identify if you’ve been affected by fraud or scams, what you can do immediately or how to contact us to report suspected fraud.
Investment scam case study
Emma and Ben share their story about being affected by a common investment scam.
NAB customers Emma and Ben are married and own a successful business in central western Queensland. With two young children and a growing client base, the couple began to consider investment strategies to support their three main financial goals: early retirement, a university fund for their children, and a sailing trip around the Mediterranean.
“We just wanted to make sure we were making smart decisions with our money,” Emma explained. “I really wanted to make sure that we were planning and had a strategy in place to reach our goals.”
A criminal makes contact
After some initial online research, the couple found several articles and forums on Bitcoin investment. It seemed like a good way of making money, but Emma and Ben wanted to seek some advice first. They just didn’t know who to ask.
A man named James then contacted Emma via an investment forum she had subscribed to. He claimed to be a trader and offered a free introductory phone meeting to discuss investment strategies. He sounded convincing and his website had good customer reviews and a credible London address, too.
An initial investment
“We opted in and went ahead with the one-hour free meeting, figuring we had nothing to lose. And, to be honest, James, our broker, was so impressive, we were in hook line and sinker,” said Ben. “The starting investment was only $2,000 and was being invested in new ‘tech stock’, which was dealing with emerging cryptocurrency. We saw dollar signs because, like many, we had read about people making millions off small investments, so it seemed pretty low risk.”
After the initial investment, Emma and Ben logged into their portfolio page. It had doubled in just a few days. James told them they were in a peak growth phase in which the purchase cost was low but increasing each day. The excited couple, predicting they were only months away from achieving their financial dreams, agreed to invest another $20,000.
Things take a turn
But things started to turn sour. James began ringing daily – sometimes several times a day – urging them to invest all their savings, totalling $72,000. Convinced that they were on a winner, they invested a further $50,000. And, to make investing easier, they also allowed James access to their internet banking so that he could transfer the investment funds himself.
The next day, James rang with bad news - their investment was dropping. Over the next few days, he made panicked calls to Emma and Ben with devastating news: the shares were in free fall. Not only had the couple lost their gains, but they had also lost most of their original investment. According to James, the only way to recover was to take a loan out on their house and invest in another of his companies.
By now James was calling, texting and emailing almost hourly. “We couldn’t catch a breath,” Emma said. “The pressure was immense, now we were just focused on getting back to square one and we were in such a panic. I couldn’t sleep at night.”
Life savings lost
Faced with losing their initial investment, Emma and Ben applied for a loan of $150,000 from their bank. On James’ advice, they claimed it was for a new car and caravan. As soon as the money was available, James logged in to their internet banking and transferred the amount over to the investment company. Ben and Emma waited for the next update.
What happened?
They never heard from James again. Many calls, emails and text messages were left unanswered. They reported the matter to the police, and the officer on duty checked the MoneySmart Investor alert list, opens in new window. She found the details of James’ company listed, and let Emma and Ben know they had fallen victim to an investment scam.
Ben is still angry. “They have almost ruined us!” he said. “It has impacted our relationship, our business, and the future of our family. Mostly, I just can’t believe that we fell for that slick sales pitch. Not only have we lost our money, but we feel like idiots.”
Many victims of investment scams feel this way. However, it’s important to remember that the criminals that perpetrate investment scams are extremely professional in their approach. They have their sales pitch down to an art with a fancy website with fake reviews to lure people in. Their job is deceiving people, and they are skilled at it.
Ways to protect yourself
- Confirm that anyone providing you with advice has an Australian Financial Services (AFS) Licence or Australian Credit Licence from the Australian Securities and Investments Commission, opens in new window.
- Check that the company you may be thinking about investing in is not on the MoneySmart Investor alert list, opens in new window.
- Criminals regularly forge certificates to make themselves look legitimate. Check the website directly and don’t rely on “certificates” sent by the person you’re engaging with.
- Contact the company directly through their official website, as scams often impersonate legitimate companies and employees.
- Make sure email addresses provided to you are the same as the registered company’s. Slight differences, such as a ‘1’ instead of an ‘i’, can be hard to spot.
- Be very careful providing credentials such as driver licence or passport details as a part of an investment opportunity, as they may be used for identity theft.
- Criminals will often request remote access to help you set up a “trading platform”. This is a strong sign it’s likely to be a scam.
- Check for reported investment scams on the Australian Competition and Consumer Commission’s (ACCC) Scamwatch website, opens in new window.
- Be wary of any investment seminars or “free” advice that make big claims but provide minimal details.
- Never provide your NAB Internet Banking login details or passwords to a third party.
- Do your research before making any decisions and always allow yourself a cooling off period.
- Consider discussing the opportunity with a friend or family member for an objective opinion.
- Remember that cryptocurrency is a new technology, and it can be highly volatile. If you send funds to an exchange or cryptocurrency account that you don’t have access to, you can only get your money back if the person you paid sends it back.
Helpful resources
How we can help
If you’re a NAB customer and you believe your business or personal accounts have been impacted by fraud or a scam, we’re here to help. Explore the immediate steps you can take to protect yourself and discover when you should get in touch with us to make a report.
Learn what to do in the event of fraud or scams
Get updates on the latest fraud alerts
IDCARE
IDCARE is Australia and New Zealand's not-for-profit counselling and support service set up to assist Australians impacted by identity theft and cyber-related crimes.
IDCARE can assist NAB customers to navigate through the process when identity details or credentials have been compromised through fraud or scams. IDCARE is a free service for all Australians.
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Australian Government | Australian Cyber Security Centre (ACSC)
The Australian Cyber Security Centre (ACSC) brings cyber security capabilities from across the Australian Government together in a single location. It’s the hub for private and public sector collaboration and information sharing to combat cyber security threats. ACSC provides topical, relevant and timely information on how home internet users and small businesses can protect themselves from, and reduce the risk of, cyber security threats such as software vulnerabilities, online scams, malicious activities and risky online behaviours.
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Australian Government | ReportCyber
ReportCyber is a secure reporting and referral service for cybercrime and online incidents which may be in breach of Australian law. The ReportCyber website provides a cybercrime reporting mechanism as well as helpful information about cybercrime.
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Australian Competition and Consumer Commission | Scamwatch
Scamwatch provides information to consumers and small businesses about how to recognise, avoid and report scams using publications, videos and other online resources.
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Australian Government | Office of the eSafety Commissioner
The Office of the eSafety Commissioner provides online safety education for Australian children and young people, a complaints service for young Australians who experience serious cyberbullying, and address illegal online content.
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Australian Government | Attorney-General’s Department
The Attorney-General’s Department website provides helpful information and resources about your rights and protections in regards to identity security, freedom of information and cyber security. The Department has developed a range of resources to assist people protect their identity and recover from the effects of identity crime.
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