Share Scams
Don't get caught
Also known as a boiler room scam, this modern con aims to trick you out of your money by offering online investment opportunities that seem too good to be true – because they are.
Whenever a new form of technology becomes readily available to the public, money-generating scams are likely to follow. ASIC receives a large number of reports each year of internet misconduct, ranging from illegal offerings of securities; unapproved prospectuses being placed on the internet; ‘hot tips’ about particular securities; and dubious investment advice.
If you receive an email or mail from a company offering to buy your shares at a lower rate than their market value, alarm bells should ring. Other scams include free stock offers and share hawking promotions by companies yet to be formed. You should also be cautious of investment advice from self-proclaimed financial gurus who do not have the appropriate license. There are, however, foolproof measures for protecting yourself from unreliable information from unproven sources such as email, mail, e-newsletters, bulletin boards and chat rooms:
- Always carefully investigate money-making schemes before parting with your money. If in doubt seek professional advice.
- Don’t be pressured into making a decision on the spot.
- Check the ASIC register of authorised financial representatives before you deal with unknown financial planners. You can check their details on line at www.fido.asic.gov.au or call ASIC.
- Ask to see a Product Disclosure Statement (PDS)
- Always ask to see their Australian securities dealer’s licence number and enquire who is lodging their prospectus.
- If it’s a foreign operation; ask for their Australian Registered Body Number (NRBN), their Australian Business Number (ABN) and Australian Company Number (ACN).
- Simple questions such as What is the name of your company?, Who owns your company? And What is your address? can also uncover scams.
