As a part of the government strategy to target investment scams, ASIC and the Australian Competition and Consumer Commission (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, running 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 surely a positive step. 

According to the National Anti-Scam Centre, which commenced operation on 1 July 2023, Australians reported a record $3.1 billion of losses to scams the previous year. The Centre is already making inroads by highlighting the most harmful scams and making it easier for Australians to report scammers, and it will build its capabilities over the next three years, working on a new system to improve scam data-sharing across government and the private sector.

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

ASIC recommends conducting the following checks before handing over any investment money: 

  • Check whether the company or person is licensed or authorised: generally, a company or finance professional must hold an Australian financial services (AFS) licence to issue or sell investments in Australia, or they must be an authorised representative of an AFS licence holder.
  • Understand how the investment works: ASIC recommends obtaining a product disclosure statement (PDS) or prospectus from the public website for the company, speaking to a financial adviser and/or searching ASIC’s Offer Noticeboard.
  • Check for common signs of an investment scam: confirm the company’s details through open-source searches and consider calling the number on the public website. Be wary of any offer documents sent by email. 

Tip: You can consult the investor alert list at https://moneysmart.gov.au/check-and-report-scams/investor-alert-list.