How to avoid falling for an investment scam


Published on

When it comes to keeping your finances secure online, you may be your own best line of defence.

Recognising financial scams is more important than ever since COVID-19 as we've moved more of our lives online.

But the digitisation of the workforce and our social lives has led to a large increase in online financial scams.

how to avoid falling for an investment scam

Scam-related complaints rose significantly in the months following the outbreak of COVID-19, according to the Australian Financial Complaints Authority (AFCA), and jumped 23% in the second half of 2020.

COVID-19 generated 15% of financial complaints in the year to March 2021.

Cybercrime increased by 13% from 2020-2021, with a cybercrime reported every eight minutes in Australia in 2021, according to the Australian Cyber Security Centre Annual Cyber Threat Report, compared with 10 minutes in 2020.

Scammers often use the names of well known financial institutions such as the Australian Tax Office or investment companies like Vanguard to con Aussies.

Here's how to avoid being duped by an investment scam.


  • Check the full name, address and AFSL number of any financial provider against the Australian Securities and Investments Commission's (ASIC) database.
  • Check that the website is correct by doing a Google search for the provider and comparing that URL to the one you have been given.
  • If you are dealing with an individual and you have their name, check that they are associated with the provider by searching for them on LinkedIn.
  • If still in doubt, do a Google search for the head office, call and check that the person works there.
  • Check that the style of the communication is consistent with a reputable provider - spelling mistakes or poor grammar should be a warning sign.


  • Do not provide personal details to those who request your details through advertising or via social media.
  • Do not engage further with a provider who pressures you to make a decision quickly - a reputable provider will not engage in coercive behaviour.
  • Do not engage with providers that promise a particular return on share-related investments. As the old saying goes, 'If it looks too good to be true, it probably is'.
  • Do not pay with Bitcoin; no reputable provider requests payments made in cryptocurrency.

Get stories like this in our newsletters.

Related Stories


Monique Batterham has been the head of risk and compliance at Schroders in Australia for more than 14 years. She started her career at the Reserve Bank of Australia in the Bank Supervision area which later formed part of APRA. She went on to work at Macquarie Bank, QBE and State Street. Monique holds a degree in Commerce (Banking and Finance) from the University of Canberra as well as a Masters in Applied Finance from Macquarie University. Monique is a Certified Compliance Professional of the GRC Institute and most recently completed a Certificate in Leadership Principles and Organisational Leadership at Harvard Business School.  As part of her work with the GRC Institute, Monique travelled to Indonesia, providing compliance training to the Indonesian regulator, Bapepam.