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Look after your Money This Christmas

Keep your money safeSchemes and scams

Look out for sleazy marketing and sloppy dealings

You can avoid phoney investment schemes and financial scams if you know what to look for. ASIC investigators have found some telltale signs that they are keen to share with you.

Sleazy marketing techniques

Financial fraud is as old as finance itself. Have you ever run up against these sleazy marketing techniques?

  1. Promises unrealistic returns.
    In today's market, ASIC suggests that more than 15% per year should flash warning signs.
  2. Sold by word of mouth through communities or groups, ethnic communities, church groups, retirement homes, etc.
    Not mass marketed.
  3. Investments dressed up as a loan to avoid the more obvious breaches of the laws affecting managed investments.
  4. Agents sell the scheme.
    This helps the masterminds of the fraud claim they never misled investors themselves.
  5. Offered as an 'exclusive' investment opportunity, often with confidentiality agreements required.
    This makes investors feel special, and discourages them from contacting authorities like ASIC.
  6. Funds kept in foreign banks, sometimes claiming this will 'reduce tax'.
    It's almost impossible to get your money back.

Sloppy dealings

ASIC investigators also noticed that the schemes and scams never get the legal and financial side of things right. Instead they operate in a sloppy fashion to cover their tracks. For example:

  • The scheme's masterminds hold no ASIC licence.
  • The scheme issues no prospectus or official product disclosure statement. You might get some paperwork, but it falls far below the standards observed by reputable fund managers.
  • Returns, if any, paid in cash so that there's nothing in writing.

Copyright ASIC, 9 November 2004.

This article is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this article. All information is subject to change without notice. We and each party providing material displayed in this article disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of the information or material in this article. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

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