Let the buyer beware - Caveat emptor


Bigger and faster profits than real investments

Scams generally offer a higher return than genuine investments. Some offer 20% some offer 300%, it's too good to be true. By comparison over the years the Australian share market has average returns of about 8%.

Less risk and less effort than real investments

Most scams say that financial success is easy and that risk is not a problem. But real wealth demands planning, commitment and discipline. Even the best investors make mistakes and have to weather storms like market downturns and economic recessions.

Something special that genuine investments do not offer

It could be a 'secret' offer, inside information or new techniques. There is always some feature to make you feel like you have got the edge over other people. But the chances are, it is fairy tale stuff and it will not have a happy landing.

More urgent than the real thing

Every scam gets dressed up as an opportunity, so scamsters often say "Do not Miss Out" or "Act Quickly" to make you hurry before it is "Too Late". They are really just trying to grab your money before you have a chance to check properly.

Offered by a stranger

Many scams come from overseas, Nigeria is a prime example, through unsolicited email or surprise phone calls. Others get sold through "wealth creation" seminars or on the grapevine. While the people can sound genuine, they rarely have any real credentials, such as an ASIC Licence to give advice or sell investment products.

When things go wrong

These warning signs might help prevent you being scammed;

  • You are asked to make out cheques to the seller rather than to the investment proposal
  • They want the paperwork sent to their office rather than to you
  • You are asked to sign a blank withdrawal form

Source: fido.asic.gov.au

Call Wise Owl Accountants 03 9735 0077 on investments offered to you that sound too good to be true.

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