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Fake International 'Regulators' help Swindle Australians Investing Overseas

Be wary of messages, websites, phone numbers and addresses from fake 'international regulators'.

'Set up by fraudsters, fake regulator websites are part of the elaborate window-dressing designed to trick Australian investors into buying worthless shares from unlicensed, overseas-based stockbrokers. These offers are often 'verified' by the fake regulators', ASIC's Executive Director of Consumer Protection said.

The degree to which these fake regulators impersonate actual regulators can be surprisingly elaborate. They create official looking websites, and organise phone numbers answered by staff who pretend to work for the 'regulator'. One even used -gov as part of its web address to resemble, at a quick glance, .gov.

ASIC have been alerted to this problem by a number of complaints, including some from people who lost money after being lied to by a fake regulator.

In some ways, this latest trick suggests the message is starting to get through. As investors become better informed about the need to check licence details and verify information with the local regulator, these offshore swindlers are resorting to more elaborate devices to make themselves look genuine.

TIP: Only invest through licensed Australian financial services businesses. That way, you are much better protected if anything goes wrong.

How to check if an international regulator is real

If you want to check if an overseas share market regulator really exists, check the members list on the website of the International Organisation of Securities Commissions at http://www.iosco.org. You'll also find the title of the real regulator of the country you're interested in investing in.

Copyright ASIC, 1 April 2005. http://fido.asic.gov.au/fido/fido.nsf/byheadline/Fake+international+%27regulators%27+?openDocument

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