In 2017, Australian’s lost A$31.3 million to investment fraud schemes, per the May 2018 report by the Australian Competition and Consumer Commission (ACCC). This figure is almost certainly an under-representation on the total amount lost, as investment fraud is one of Australia’s least reported crimes, mostly due to shame or embarrassment of the victims. But don’t be embarrassed, investment frauds are becoming more sophisticated and harder to recognise, and with over 200,000 reports of scams last year, you are certainly not alone.
Many investors blame themselves for being defrauded and attribute the fraud to their own naivety or stupidity. DON'T! The greed and immorality of the perpetrators are not your fault. Most fraudulent investments appear legitimate from the outside. As soon as you realise your investment isn’t what it seems to be, there are a number of steps you should take to begin your attempted recovery.
STEP 1 – Know What You’re Getting Into Investment recovery can be a drawn-out, protracted exercise, and you should prepare yourself for a long fight. Do not expect to receive your money back in a fortnight, or a month, or even six. Prepare yourself for a worst-case scenario from the outset, because investment recovery is seldom straightforward.
STEP 2 – Collate all Relevant Documentation into a File Create a file with any and all documentation you can find relevant to your fraudulent investment. Go onto the internet and save all relevant documents, take screenshots of their website, and compile as much information as you can for your case. Make a note of ACN’s, ABN’s and AFSL numbers. You never know when this evidence will be useful in the future, and its common practice for fraudsters to delete any and everything they can once their fraud has been unearthed.
STEP 3 – Report the Fraud: Reporting the fraudulent investment scheme is the quickest way to have the scheme stopped and investigated. Fraud’s should be reported to the following bodies:
Your State or Territory Police Department
Australian Securities and Investment Commission (ASIC)
Australian Cybercrime Online Reporting Network (ACORN)
Australian Competition & Consumer Commission (ACCC)
Australian Taxation Office (ATO)
STEP 4 – Look for other Investors Finding other investors who are in the same boat as you can often be a reassuring process, as you begin to realise you are not alone and lift some of the blame from yourself. Joining up with other investors also strengthens your case for recovery and expands the options you have available to pursue compensation, through the potential for collective and concentrated actions, such as group mediation and/or class actions.
STEP 5 – Avoid Follow-Up Scams It’s not uncommon for scammers and frauds to attempt to perpetuate their theft through follow up scams. Often, scammers will write to individuals whose investments have failed, and offer them an ‘exit strategy’ or an investment method to ‘recover your losses’. These exit and loss-limiting strategies often require the investor to contribute further funds, citing administrative costs for the ‘transfer’ of their investment from one scheme to another. In reality, you are simply parting ways with more funds that will never be returned.
STEP 6 – Seek Professional Advice/Representation Once you have collated your documents and reported the fraud, engaging professional advice will point you in the right direction in your recovery, based on your specific circumstances. A good professional advocate or advisor will be able to help you build a strategy for recovery, and if you have formed a group with other investors, determine what actions are available to your group. Investment recovery can be a daunting, protracted and stressful process, often involving multiple stages of investigation, litigation and negotiation which can take several years. For individuals, this drawn out recovery period can take a debilitating toll on your work, livelihood and happiness. Professional advocacy companies, like the SR Group, perform recovery proceedings, mediation and negotiations on your behalf, so that you may shield yourself from the day-to-day ongoing of your matter, which allows you to continue with your life and focus on the things you actually care about. Remember, before investing, always do your research and due diligence into your investment, and make sure you understand the company’s operations and your ability to redeem your investment in the future. Our 2018 investment guide is available for free download. Don’t write your investment off straight away, and don’t be too shy or embarrassed to report it. If you’re an investor who has been defrauded, contact us now on (02) 8226 8630 or advocacy@srgroup.com.au now to arrange a cost and obligation free meeting to discuss your investment. Your investment is your hard-earned money, and we won’t let it go without a fight.
Tom Jollye
General Manager
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