The Gold Cost based scheme in question enticed investors to deposit funds into the bank accounts held by the business running the scheme.  The investors were promised that their money would be used to buy shares and generate returns well above markets.  However, the three directors behind the companies in question withdrew most of the money from the accounts, and there is likely they will not be recovered.

If you received a call from someone you didn’t know, asking about your views on investment or rattling on about investment returns higher than what the market can provide, would alarm bells start ringing?  If not, then my advice to you is they should!

Often those who hand over their cash to such schemes tend to be seeking a quick fix to a financial problem, or perceived problem.  At the risk of sounding like a broken record, there is no magic quick way to build wealth.  If you are promised higher returns than the market…then the risk must be higher than the market.  Building wealth takes time, hard work, and discipline.

So what can you do to protect your hard earned cash being stolen by unscrupulous crooks?

1. Before investing, consult a licensed financial planner to ensure the proposed investment is legitimate, suits your goals and objectives, and that it is in your best interests to invest.  You can check the person and firm you are dealing with are licensed at the Australian Securities and Investment Commission (ASIC) website:  https://www.moneysmart.gov.au/ .
2. If you receive a call from someone trying to sell you a financial product, hang up…you don’t have to speak to them.  If the caller wants to survey your interest in investing generally, still hang up.
3. If you think you have fallen victim to a scam, don’t hide it – seek advice from a qualified financial planner, or report the scheme to ASIC.  Your action may prevent others from falling victim to the same fraudster.

Unfortunately where ever there is money, crooks will be trying to get their hands on it.  We all work too hard to accumulate our wealth to simply hand it over to a fraudster.  So before you start speaking to that “cold caller”, make sure you know what you are getting into.