Be wary of real estate scams, warns the ACCC

“The losses to investment scams are horrific. Each week the ACCC receives heartbreaking accounts of people losing hundreds of thousands, and in some cases millions, of dollars,” ACCC Deputy Chair Delia Rickard said.

“These scams are very sophisticated and the scammers are very convincing. People aged 45–64 are most at risk and make up more than half the reports sent to Scamwatch," Ms Rickard said.

“Scammers will spend significant time and effort grooming their victims to invest. They will use the right technical language and also offer professional looking websites and documents to convince victims they are legitimate. It’s often only when people try to cash out their investment that they realise their money is gone.”

Investment scams mostly revolve around traditional investments such as real estate, stock and commodities and will typically see someone who claims to have “hot tips” or insider information relating to low-risk, high-return stocks and assets primed to rise in value.

“The biggest scam we traditionally see is the seminars, where people are invited to a free seminar to learn all about how to make a fortune from real estate and convince them to pay large sums of money to come to future seminars, often with strategies which are guaranteed not to work. That’s the biggest problem we see in the real estate sector," Ms Rickard said to Smart Property Investment.

Identifying a scammer can be difficult as the methods employed are looking more and more realistic, Ms Rickard warned. However, the old adage of “if it is too good to be true, it is” still rings true.

“It can be very difficult to tell what is and isn’t legitimate these days. If someone calls, emails or texts you out of the blue with investment advice, don’t engage with them no matter how legitimate they sound. Hang up the phone, or delete the email or text. If you’re searching for new investment opportunities online, don’t always trust what you read. It’s easy for scammers to create professional looking investment websites,” Ms Rickard said.

“Any claims like ‘risk-free investment’, ‘low-risk, high-return’, ‘be a millionaire in three years’, or ‘get-rich quick’ are also easy tells that you’re dealing with a scammer.”

If you are caught unawares by a real estate scam, it can be difficult to get your money back, Ms Rickard warned.

“Some are just straight scams from the beginning, there’s no property, so you should always do your homework before you invest in something and make sure it’s a real property, and it’s going to be developed, and look at the returns you’re promised and see whether or not they seem too good to be true, because if they are too good to be true, they’re probably wrong,” she said.

“In most scams, the perpetrator is usually located overseas, which makes getting money back particularly difficult. It may be that if it’s a local real estate scammer, you have some redress, but typically with scams, once you’ve lost your money, it’s gone.”

Aside from traditional investments, two up and coming scams to watch out for include cryptocurrency trading and binary options, with the former rising especially in the last 12 months.

“The rise in popularity in cryptocurrency trading has not been missed by scammers who are latching onto this new trend to con people. These are similar to any other investment scam: the scammer will claim to have inside knowledge about price movements they will use to make you a fortune. If you invest, your money will quickly disappear,” Ms Rickard said.

“Binary options trading involves scammers pretending they can predict the movements of a commodity, asset or index prices over a short time. They direct you to a website with a login, account details and a trading platform. They appear to put your money into the account and demonstrate a number of successful trades to encourage you to invest greater sums. Then your money begins to disappear and so too does the scammer.”