Australians are being duped out of millions of dollars by pump-and-dump scams using fake celebrity endorsements and impersonating financial institutions. <\/p>\n
The Australian Securities and Investments Commission has raised the alarm about a growing form of investment scams where elderly Australians are being pressured into buying legitimate stocks to lift the price before it rapidly falls. <\/p>\n
A pump-and-dump scam works by enticing people to buy a share price so the initial holders can sell at a higher price and make a profit. <\/p>\n
One recent example involved a share price rise rapidly to almost $US11 before falling to $US1 soon after.<\/p>\n
ASIC commissioner Alan Kirkland says these forms of scams are particularly convincing, as investors actually own the stocks through a legitimate broker.<\/p>\n
\u201cThe loss occurs when the scammers sell out and the share price collapses. Investors are left holding shares worth a fraction of what they paid,\u201d he said. <\/p>\n
\u2019How can it be wrong?\u2019<\/p>\n
Comments provided by ASIC from victims show the devastating consequences for those caught in these scams. <\/p>\n
\u201cFrom that point on, as you could imagine, I was infuriated. I only left the apartment once. It took me a month to get out of the apartment because I was so upset about the whole thing,\u201d an unidentified victim said. <\/p>\n
\u201cI have got in touch with so many people and I know so many people who have been absolutely devastated. There have been divorces, people have lost their homes.\u201d<\/p>\n
A 74-year-old victim said she was duped by a fake post with a Commonwealth Bank logo and a man purporting to be former CommSec economist Tom Piotrowski giving stock advice. <\/p>\n
\u201cIt had the logo, it had ASIC\u2019s name on it, and it had AFCA\u2019s name on it. Now if you see that, how can it be wrong?\u201d the person who wanted to remain anonymous said. <\/p>\n
\u201cIt says that there are \u2018very limited spaces left\u2019, so you join. You just hit the join button, and you go onto WhatsApp. I don\u2019t even think I knew what WhatsApp was. I had no idea what WhatsApp was until this. You go on, and then you are groomed.\u201d<\/p>\n
The victim said the scammers drew them in by giving them a couple of profitable stock tips. <\/p>\n
\u201cThe profit is there, hence each time you keep increasing your money because there is so much pressure,\u201d the victim said. <\/p>\n
\u201cAt 10.30pm one night it just dropped, and I realised what had happened. I had met a scammer.<\/p>\n
\u201cThis has been devastating. As I am 74, I cannot work and now struggle to live on a pension.\u201d<\/p>\n
Rise in scams<\/p>\n
The regulator says these types of scams are on the rise and are causing substantial harm to the community.<\/p>\n
ASIC warns Australians should be \u201cextremely cautious\u201d of investment tips through social media and messaging apps, as they are likely a scam.<\/p>\n
The regulator says it has noticed a spike in scammers using the identities and images of well-known finance industry figures, including respected market commentators and economists, to lure consumers into WhatsApp and other messaging groups where they are encouraged to buy investments, particularly shares.<\/p>\n
Once consumers join a messaging group, scammers provide stock tips designed to artificially inflate the price of a share before selling their own holdings. The share price then falls and leaves unsuspecting investors with significant losses.<\/p>\n
\u201cThese scams are becoming increasingly sophisticated, and scammers are exploiting the trust Australians place in recognised experts, financial institutions and investment brands by faking their platforms and endorsements,\u201d ASIC chair Sarah Court said.<\/p>\n
Ms Court said legitimate investment opportunities did not come from strangers on messaging apps pressuring people to buy shares.<\/p>\n
\u201cIf you\u2019re receiving stock tips through WhatsApp, Telegram or another messaging service, particularly after responding to a social media post, you should assume it\u2019s a scam,\u201d she said. <\/p>\n","protected":false},"excerpt":{"rendered":"Australians are being duped out of millions of dollars by pump-and-dump scams using fake celebrity endorsements and 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