How to reduce the risk of financial scams
Protect your personal information
- Use strong passwords.
- Shred your personal documents.
- Secure your devices with security software and use secure websites.
- Monitor your bank transactions, credit card and online shopping accounts.
- Check your credit report and your superannuation balance regularly.
- Update privacy settings on your social accounts.
For more tips, see identity theft.
Do your own research
- Check before you invest — Always check any investment opportunity to make sure it’s real, especially if approached through social media.
- Ask questions — Be wary if someone avoids answering questions about the legitimacy of their offer.
- Get advice — Get independent financial advice before you invest.
Don’t rush into a quick decision
- Don’t click — on any links in suspicious text messages or emails.
- Be wary of unexpected contact — particularly if you’ve been contacted through social media. You don’t know who you’re dealing with.
- Take your time — Don’t be pressured to make a quick decision with your money you may regret later.
- Trust your instincts — If an offer sounds too good to be true, it probably is.
- Ask someone — If you’re unsure about something, talk to someone you trust about it. They may see red flags that you don’t.
- Check payments — Be suspicious if you’re asked to pay for something with gift cards or cryptocurrency.
Signs of investment scams
An investment offer may be a scam if the person:
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does not have an Australian financial services (AFS) licence
a licence given by ASIC that allows people or companies to legally carry on a financial services business. -
or says they don’t need one
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constantly contacts you (phone calls, texts or emails) and pressures you to make a quick decision
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uses the name of a reputable organisation to gain credibility (for example, NASDAQ, Bloomberg)
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has an investment prospectus that isn’t registered with ASIC
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offers you very high investment returns
If you spot any of these signs, hang up the phone or delete the email. If you manage to record any of the scammer’s details, report them to ASIC. Learn more about how investment scams work.
Signs of crypto scams
If you’re investing in crypto, watch out for these warning signs:
- Unexpected contact — someone you don’t know contacts you with investment advice or offers.
- Recommended by someone familiar — a fake celebrity endorsement, online influencer, online acquaintance or romantic partner.
- Pressure to take action — to move your crypto, use crypto to pay for something, or pay to access your crypto.
- Something feels off — strange tokens appear in your wallet or a crypto investment offers ‘guaranteed high returns’.
Find out more about how crypto scams work.
Signs of superannuation scams
Scammers can try to get access to your superannuation. For example, offers to help you get your super early or help you ‘control’ it by opening a self-managed super fund (SMSF). Learn more about how superannuation scams work.
Signs of banking and credit scams
A bank will contact you if there are suspicious transactions on your account. But they will never ask you for sensitive information such as online banking passwords or codes. Learn more about banking and credit scams.
Signs of identity theft
If your identity has been stolen, you may not realise for some time. Learn more about how to spot the signs of identity theft.
Check an investment is real
If you’re offered an opportunity to invest, check it’s legitimate by asking:
- What is your name and what company do you represent?
- Who owns your company?
- Does your company have an AFS licence and what is the licence number?
- What is your address?
- Is your investing prospectus registered with ASIC?
Always verify any information through independent sources.
To do your own research, check:
- ASIC’s Offer Notice Board — If the company is offering shares or interests in a managed investment scheme, see if the company has lodged a disclosure document with ASIC.
- Publicly listed phone directories — Check whether the address and contact details are correct.
- ASIC Connect’s professional registers — Check the company has an AFS licence or Australian credit licence. Also check that the number given matches what is on ASIC’s registers.
- Our investor alert list – Check if the company website has been identified as a scam and removed.
- International Organization of Securities Commission’s (IOSCO) investor alerts — Make sure the company is not named.
If you suspect a scam hang up the phone or do not respond to the email. Stop dealing with the person or delete and block them if it’s through social media.
For more detailed steps to take, see check before you invest.
There are many ways investment scams may appear. Three main examples are:
- The investment offer is completely fake.
- The scammer is pretending to offer a legitimate investment, but keeps any money given to them.
- The scammer says they work for a well-known company that is offering a legitimate investment – but they’re lying.
In any case, the money you ‘invest’ goes straight into the scammer’s bank account and not towards any real investment. It is extremely hard to recover your money if it goes to a scammer based overseas.
Anyone can be scammed, and every scam is different. Scams are often hard to spot and can feel legitimate in the moment. Scammers can use professional-looking websites, advertisements and apps, and impersonate legitimate companies.
Scammers are using deepfake technology to create fake celebrity videos promoting Quantum AI.
Quantum AI is a fake online investment program. It claims to use artificial intelligence (AI) technology and quantum computing to generate high returns for investors. Fake trading results are displayed on a website manipulated by scammers.
If you see a celebrity spruiking an investment, search online to see if the person has posted warnings about being impersonated.
Spot the signs of a deepfake video:
- The person speaks with unusual pauses, odd pitches or different accents.
- Mouth movements aren’t in time with their speech.
- Facial expressions and movements don’t match the speaking tone.
- The video is low resolution.
Do not click on any links promoting Quantum AI, or similar scams such as Immediate Edge and Quantum Trade Wave. Learn more about this scam.
Scammers can come from anywhere. The most common approaches are:
- Unexpected contact – they may contact you by phone, social media, email or text message. They might pretend to be someone you know, such as your bank, financial adviser, fund manager, or even a friend. They’ll offer guaranteed or unrealistic high returns on an investment.
- Fake investment trading – they use real investment trading platforms to set up fake accounts. Then they will help you trade via an account manager or offer to trade on your behalf. Once you deposit your money it’s gone for good.
- Fake investment comparison websites – scammers will get you to enter your personal information into their fake website, then contact you to sell their scam investment.
- Websites with fake ASIC endorsements – slick websites with fake investing information and performance figures. They may claim to be endorsed or approved by ASIC, and may show the ASIC logo.
- Dating apps – using romance to form a relationship with you, then offering you an ‘investment opportunity’. (This is also known as ‘romance baiting’.)
- Paid advertising – scammers often pay big money for advertisements, to appear high in online search results. They also advertise through social media. Advertising a scam is illegal.
- Fake news articles – scammers will promote fake articles on social media or news websites, linking to their scam websites.
- Deepfake celebrity endorsement videos – scammers use a deepfake celebrity video to promote fake investments.
A scammer may tell you they’re offering:
- guaranteed, quick and easy investment returns and sometimes tax-free benefits
- investments in shares, cryptocurrency, mortgage, real estate or virtual investments, all with ‘high returns’
- a (fake) trading platform to trade foreign currency, gold, options or futures
- commissions for building their client base and getting others to invest
- an opportunity with no risk or low risk, because you will:
- be able to sell anytime
- get a refund for non-performance
- have insured or ‘guaranteed’ transactions
- be able to swap one investment for another
- inside information on initial public offeringsWhen a company lists on a stock exchange and offers shares to the public for purchase. Also known as a float.
or discounts for early bird investors, often falsely impersonating real companies to pitch their offer
How scammers convince you
Scammers will look at the latest market and investment trends for opportunities. They often use well-known company names, platforms, and terms (such as ‘crypto’) to lure investors in and appear credible.
This may include fake:
- crypto (virtual currency) investments
- trading companies, getting you to invest with them through real apps and trading platforms
- offers of inside information on public company floats, often naming ones that have been hyped in the media or on social media
- offers to get your money back from a sharemarket fall or previous scam
- references to well-known Australian companies or regulators, often using the Australian Coat of Arms or Government logos
- offers to keep your money safe in well-known Australian banks
Beware of scammers offering investments or asking for payment using crypto. A legitimate financial services firm is unlikely to ask you for payment in crypto. Crypto-assets (for example, cryptocurrency) are largely unregulated in Australia and are high-risk, volatile investments.
Payments made using crypto are very difficult to trace and recover. To find out more, see cryptocurrencies.
Other tactics used by investment scammers
Operate from overseas
Investing in overseas companies or through brokers based outside Australia can be risky. If you invest and something goes wrong, you may not have access to important consumer rights and protections under Australian laws.
Convincing you not to pull out of the investment
They may try to swap your current investment for another one, convincing you the value will increase, or threaten you with legal action or fees.
A common tactic is to ask for ‘insurance’ or ‘taxes’ before funds invested can be released. This is just another method to extract more money from you.
‘Pump and dump’ scams
Scammers use social media and online forums to create fake news and excitement in listed stocks to increase (or ‘pump’) the share price.
Then they sell (or ‘dump’) their shares and take a profit, leaving the share price to fall. Any other investors are left with low value shares and will lose money. This may be market manipulation which is illegal.
Always use a licensed Australian financial services
A licence given by ASIC that allows people or companies to legally carry on a financial services business. This includes selling, advising or dealing in financial products. Only deal with licensed businesses. You are better protected if things go wrong and will have access to free dispute resolution services. A licence does not mean that ASIC endorses the company, financial product or advice. Or that you cannot incur a loss from the investment. ASIC grants a licence if a business shows it can meet basic standards such as training, compliance, insurance and dispute resolution. The business is responsible for maintaining these standards. The ASIC Connect Professional Registers will tell you if the company or person holds an AFS licence.
