ASIC flooded with scam complaints

Telephone investment frauds are reaching epidemic proportions with the Australian Securities and Investments Commission (ASIC) reporting a sharp rise in the number of complaints received over unsolicited advice.

ASIC director of consumer communication Michael Dunn said cold-calling complaints had doubled from August to September 2004.

“We have also observed an overall increase in the number of complaints about cold-calling throughout 2004,” Dunn said.

The regulator has warned the public to be extremely cautious of phone calls or emails out of the blue offering shares or other investments.

“Slick marketing, high pressure tactics and promises of high returns are commonly employed in ways that can deceive even experienced business people,” Dunn said.

Dunn said favourable stock market conditions had partly fuelled the surge in scams, but warned that in recent times, the promoters of these schemes were employing sophisticated techniques to hoodwink investors.

“We have seen increased efforts by these con-artists to swindle previous victims through 'secondary' scams, sometimes even posing as investigators or lawyers acting on behalf of other victims,” Dunn said.

Meanwhile, the regulator concedes that consumers are becoming more wary of investment scams and picking up the telephone to report suspicious activity, there are many investors loosing money, especially to overseas ventures.

Last week a former Melbourne-based Grosvenor Securities representative pleaded guilty to five counts of obtaining financial advantage by deception after syphoning more than $1million of clients funds which were channelled into an investment scam operating out of Nigeria.

“Once your money has gone offshore it is probably gone forever,” Dunn said.