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ASIC Identifies Suspicious Investment Opportunities

As a part of the government strategy to target investment scams, ASIC and the ACCC through the newly formed National Anti-Scam Centre have published an investor alert list which may help consumers to identify whether entities they are considering investing with could be fraudulent, a scam or unlicensed. While the list is not exhaustive, as new scams are appearing every day, any reduction of consumer harm, financially and non-financially, is seen as a win.

According to the National Anti-Scam Centre which commenced operation on 1 July 2023, Australians reported a record $3.1bn of losses to scams the previous year, which was 80% more than the year before. While the Centre is still building its capabilities over the next 3 years by working on a new system to improve scam data sharing across government and the private sector, it is already making inroads by highlighting the most harmful scams and making it easier for Australians to report scams.

This new investor alert list replaces the previous list of “companies you should not deal with” issued by ASIC but has the advantage of including both domestic and international entities that the regulators are concerned about. These concerns largely consist of entities operating and offering services to Australians without appropriate licenses, exemptions, authorisation or permission. The alert list also includes imposter entities which run impersonation scams that falsely claim to be associated with legitimate and often well-known businesses.

“At launch, our investor alert list includes 52 unlicensed entities and 25 websites impersonating legitimate entities” – ASIC Deputy Chair, Sarah Court

For consumers looking to invest, ASIC recommends conducting the following checks before handing over any money:

Is the company or person licensed or authorised – generally a company or finance professional must hold an Australian Financial Services (AFS) licence in order to issue or sell investments in Australia, or they must be an authorised representative of an AFS licence holder. Checks can be made through the ASIC website on professional registers, the financial advisers register, or Australian registered scheme number in relation to a managed investment scheme to ensure appropriate licences are valid.

  • Understanding how the investment works – ASIC recommends obtaining a product disclosure statement or prospectus from the public website for the company, speaking to a financial adviser and/or searching ASIC’s Offer Noticeboard. In addition, ASIC reminds consumers that investments including crypto, direct investment in real estate or precious metals, and international investments not offered by licensed Australian providers are not regulated by ASIC and are higher risk. Consumers are not protected if things go wrong.
  • Check for signs of an investment scam – consumers should check a company’s details through open-source searches and call the number on the public website if required and be wary of any offer documents sent by email. The investor alerts list should also be consulted in conjunction.

Even if you invest in a legitimate financial service or product from a licensed company/individual, there may be instances where things can go wrong. However, those entities are obliged by law to take steps to resolve any complaints from consumers. For consumers that invest in unlicensed or unregulated products in Australia, there is very limited assistance should things go wrong.

Going forward, ASIC will continue to add to the investor alerts list and have urged both the industry and consumers to assist in identifying suspicious websites or investments scams by reporting them to the appropriate authorities.


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