Investment scams involve promises of big payouts, quick money or guaranteed returns. Always be suspicious of any investment opportunities that promise a high return with little or no risk – if it seems too good to be true, it probably is – and is highly likely to be a scam.

Common types of investment scams

Cryptocurrency scams
Cryptocurrencies are digital currencies. Bitcoin is the most well-known form of digital currency. In Australia, cryptocurrency is not treated as ‘money’ or a ‘financial product’ and you have less protection if you invest and it turns out be a scam or you lose a lot of money.
It is very difficult to identify legitimate cryptocurrency investments from scams. Scammers take advantage of the hype and the less regulated environment to ‘invest’ in Bitcoin or another cryptocurrency on your behalf.
Before you invest you should ask yourself if you are willing to lose some or all of the money you have invested and know that if you go ahead you are investing with little or no protections behind you.
Cryptocurrency investment scammers are convincing. They may advertise or post on social media offering great returns from cryptocurrency trading. If you click on the advertisement or post, the scammer will contact you or you will be directed to a fake website. The scammer will offer to make an investment on your behalf, or provide details of an app or website through which you can invest.
Cryptocurrency scammers also commonly use platforms such as Discord and Telegram to contact people.
The scammers will encourage you to buy cryptocurrency through an exchange or request you send money to a company for them to do so on your behalf. They will then claim to either trade on your behalf, or coach you through making trades yourself. You will be able to see the profits you have made on a webpage, app or custom MetaTrader platform.
The data you can see will be fake and will show you profiting (or losing as a way to get you to invest more money). Eventually you will be unable to withdraw any money.
The scammers will make excuses for delays in withdrawals, you are banned from the platform or the trading platform is closed. When you try and find out what has happened, the scammers cannot be contacted and your money is gone.
Unsolicited contacts about investing
A scammer claiming to be a stock broker or portfolio manager calls, emails or contacts you on social media and offers financial or investments advice. They may even claim to be from an investment firm or company you have heard of, as scammers sometimes impersonate these businesses to seem legitimate.
The scammer will claim what they are offering is low-risk and will provide you with quick and high returns, or encourage you to invest in overseas companies.
The scammer’s offer will sound legitimate and they may have professional looking websites and resources to back up their claims. They will be persistent, and may continue to contact you until you agree to invest.

Romance baiting
The scammer sets up a fake dating profile and will connect with you on a dating website, dating app or social media.
The scammer will ask to continue chatting to you off the dating website or app, typically on a free but encrypted chat site such as WhatsApp, Google Hangouts or WeChat. They may say they want to do this as these chat sites are ‘more private’.
Scammers will make an effort to build your trust and will often do things like express strong emotions for you in a short period of time and share lots of ‘personal’ things with you.
Once they have gained your trust the scammer will tell you about an investment opportunity. Often, they say they have invested a small amount of and made a lot of money very quickly. They will encourage you to initially transfer a small amount of your own money to show how easy the investment is. You may see a quick return. The scammer then encourages you to invest larger amounts.
The scammer will tell you to top up your accounts to increase your profits. If or when you run out of money to transfer or want to withdraw all your funds, the scammer will cease all communication. You will then be unable to obtain your investments from the platform or be told the investment has gone wrong.

Celebrity Endorsement Scams
Scammers use the image, name and personal characteristics of well-known celebrities without their permission, to entice you into investing. Fake celebrity endorsements are often used to advertise scam cryptocurrency schemes.
The way the celebrities’ image is used can take two forms:
1. An advert might pop up on social media or even YouTube using a celebrity’s image and claiming they endorse or have made a large amount of money from an investment opportunity.
2. You may see a fake news story about an investment opportunity which appears to be from a well-known media site such as ABC