Scams

Some investment seminars may try and convince you to follow high risk investment strategies, such as borrowing huge sums of money to buy property. Others promote investments that involve lending money with no security risky terms. It is important to look carefully at what an investment scheme or seminar is offering, to ensure the information you are provided is legitimate and beneficial. Attending an expensive seminar or investing in the wrong kind of scheme can be costly mistakes!

The investments that the seminars offer are often over-valued and you may have to pay fees and commissions that the promoters did not tell you about beforehand. The seminar promoters might offer ‘rent guarantees’ or discounts for ‘buying off the plan’—but these may not deliver the benefits they promise when the total cost of the deal is taken into account.

Seminars and real estate investment schemes make money by charging you attendance fees, by selling you over-priced merchandise, and by selling property and investments without letting you get independent advice. They often make misleading or deceptive claims, pressuring you to purchase risky investments that inevitably result in an investment loss.

• Advertisements for seminars or real estate investment schemes that promise a ‘risk-free investment’, ‘be a millionaire in three years’ and ‘get-rich-quick’
• Promises of above-average returns at little or no risk
• Offers of loans to cover the costs of both the investment and further investment seminars
• Investment seminars that offer to teach you ‘secret’ or ‘exclusive’ techniques for building wealth
• Some seminars or schemes may even fly you to the property location to view the property, pressuring you into the purchase without giving you time to obtain independent information or advice

• Remember there are no get-rich-quick schemes – the only people who make money are the scammers
• Do not let anyone pressure you into making decisions about money or investments – always get independent financial advice
• Family members and/or friends may try to involve you in a scam without realising that it is a scam – you should seek independent advice (i.e. lawyers, solicitors, financial advisors)
• Be wary of investments promising a high return with little or no risk
• Do not open suspicious or unsolicited emails (spam) – delete them
• NEVER reply to a spam email – even to unsubscribe
• If it looks too good to be true—it probably is.

Check with ASIC (Australian Securities and Investments Commission) and the ACCC (Australian Competition and Consumer Commission) to see if they have taken any action against promoters or their schemes. ASIC’s MoneySmart website has more information about investment seminars.

DO NOT commit to any investment at a seminar — the atmosphere at these events can be quite charged and exciting, but investment decisions should only be made after a lot of thinking, and most importantly, after seeking advice from an independent financial adviser licensed by ASIC.

The easiest way to avoid these scams is by not responding to the advertisement for the seminar. If you believe the seminar might be worthwhile, seek independent professional investment advice before deciding to attend.

No investment is risk-free, including real estate investments. There can be major costs involved (such as legal fees and stamp duty) and the market can change overnight.

Take your time and make your decision based on independent research and expert advice.

If you have been approached about a seminar or real estate investment which doesn’t seem right, or if you have invested money and now realise it is a scam, you can report a scam through the SCAMwatch website.