Investment Scams No Longer Look Like Scams. How to Spot the New Ones
Investment scams have changed how they find people. On 28 September, Scamwatch, the government's scam reporting service, warned that many no longer start with a pushy cold call or an obviously fake ad. They start quietly, in places that feel safe, and they catch everyday Australians and small business owners alike.
Scamwatch describes three common starting points: a friendly WhatsApp group chat, a fake news article, and a tip from a friend or relative who has been fooled themselves. None of them involves a hard sell, which is why people trust them.
Three ways the new scams start
The details below come from Scamwatch's alert, Investment scams hiding in plain sight, published on 28 September.
1. A friendly WhatsApp group about a hobby
You get added to a WhatsApp group for people who share an interest, such as fishing or sport. It feels like a real community. People chat, share photos and have a laugh.
Then someone calling themselves a "professor" or investment expert starts posting about a trading platform. Other members reply with screenshots of their returns and thank-you messages. Those members are part of the scam.
Once you deposit money, the platform shows you profits. Some people are even allowed to withdraw a small amount, to build trust. When you try to take out the rest, you are suddenly told to pay "fees" or "taxes" first. Then the account is blocked and everyone in the group disappears.
2. A tip from a friend or relative
A friend, relative or colleague tells you about an investment because their account looks like it is doing brilliantly. They might even earn a commission for bringing you in.
They are not lying to you. They have been fooled too. The profits on their screen may be fake, or early investors are being paid with newer investors' money (a Ponzi scheme). Eventually withdrawals stop and the scheme collapses, usually hurting the people who joined last.
3. A fake news article
Scammers copy the look of trusted news outlets. Scamwatch's example involved Reuters, the international news agency whose stories appear in newspapers and news sites around the world. Scammers built a fake webpage dressed up as a Reuters article. It claimed a fraudulent investment platform had passed safety checks and had an "official partnership" with Reuters, and it included a link to open an account.
Celebrity scams have shifted the same way. Instead of a fake ad showing a celebrity endorsing a product, scammers now write a fake news story about the celebrity and slip the investment into it. It reads like news, not like an ad.
Warning signs to look for
Scamwatch lists these red flags:
- Pressure to act quickly.
- An invitation to a chat group you did not ask to join, which then leads to investing.
- Celebrity recommendations or "news articles" linking to an investment.
- Promises of high, guaranteed or unusually consistent returns.
- Being asked to recruit friends and family for a commission.
- Being asked to pay extra fees, taxes or deposits before you can withdraw.
The last one is the clearest sign. If you have to send more money to get your own money back, stop there.
Why small business owners are targets too
These scams are not only a risk for older relatives. Small business owners often have cash moving through their accounts, are used to making quick money decisions, and belong to plenty of community and industry group chats.
To protect yourself and your business:
- Leave and report any group you were added to without asking. In WhatsApp's privacy settings, you can choose who is allowed to add you to groups, for example only your contacts.
- Never install an app or remote access tool because someone in a chat told you to. If a stranger wants software on your device, treat that as a scam.
- Keep business and personal money separate. If a personal account is hit, the business can keep running.
- Talk about it with family and staff. Scams that spread through friends rely on people being too embarrassed to say they are unsure.
How to check an investment before you pay
Scamwatch's advice comes down to three steps.
Stop. Do not rush to transfer money or share personal details, especially if you feel pressured.
Check. Make sure the person or company holds an Australian financial services (AFS) licence. Moneysmart, the government's money guidance site, has a check before you invest page that walks you through ASIC's registers and its Investor Alert List. Confirm the person works where they say they do, using contact details you found yourself, not ones from the chat.
Protect. If you think you have been scammed, stop sending money and call your bank straight away. Then report it to Scamwatch.
Last year, more than 274,000 Australians were scammed. Behind that number are parents, friends, neighbours and colleagues. Stop before you act. Check who you’re really dealing with. Protect yourself and others by reporting the scam to Scamwatch. #StopCheckProtect
If you have already sent money
- Call your bank now, not tomorrow. The sooner they know, the better the chance of stopping or recovering a payment.
- Do not pay a "release fee" or "recovery fee". Be very wary of anyone who contacts you offering to get your money back for a fee.
- Change passwords on email and banking, and turn on multi-factor authentication or passkeys.
- If you installed anything the scammer sent you, stop using that device for banking until it has been checked.
- Report it to Scamwatch and, if your device was hacked, to ReportCyber at cyber.gov.au.
If a phone or laptop has had a scammer's app or remote access tool installed, give us a call before you use it for anything important. We will check it over and make sure nothing is still running on it.
