LAWFUEL – Law News Daily – The Australian Securities and Investments Commission (ASIC) has urged consumers from non-English speaking backgrounds to beware of potential scams, following concern over a suspected illegal investment scheme targeting Sydney’s Chinese community.
ASIC’s warning follows the unearthing of a scheme requesting would-be investors contribute $10,000 or more in an unregistered ‘unit trust investment’ via a website.
A unit trust investment is established by a company which purchases a fixed, unmanaged portfolio of income producing securities and then sells units in the trust to investors. Investors funds are then pooled and used to fund property development projects.
Executive Director of Consumer Protection, Mr Greg Tanzer, said that while action from ASIC resulted in the particular website being removed before investors signed up, the regulator is concerned members of Australia’s ethnic communities and people of non-English speaking backgrounds are not conducting sufficient inquiries and safeguarding themselves against illegal schemes.
‘If someone asks you to join an investment scheme, check to see if it’s operating legally’, he said.
Mr Tanzer also warned that promoters of illegal schemes frequently promote the schemes to particular ethnic communities by word of mouth and promise unrealistic returns.
‘History and experience have shown us that these schemes and scams often appeal to a vast number of people from a certain community but victims are reluctant to come forward. People often feel embarrassed about being conned – they may have hidden the truth even from their families.’
Potential investors are encouraged to carry out the following safety checks if they are considering investing their money in a scheme:
1. Search ASIC’s database to see if the company managing the investment holds an Australian financial services licence. This is available on ASIC’s website at www.asic.gov.au or by contacting ASIC’s Infoline on 1300 300 630.
2. Search ASIC’s database to see if the scheme is registered with ASIC.
3. Check ASIC’s list of illegal investments available at www.fido.gov.au
and safety checks,
Visit FIDO, ASIC’s website for consumers and investors for financial tips
4. Ask the seller for their product disclosure statement. This document must clearly and concisely set out information about the product.
ASIC offers a range of resources in a number of community languages for people from non-English speaking backgrounds. Our You Can Complain guide provides practical help and tips on the options available to complainants and is available in Chinese, Arabic and Vietnamese.
To obtain a free copy of You Can Complain, phone ASIC’s Infoline on 1300 300 630 or visit www.fido.gov.au
Complaints regarding possible scams or illegal schemes may be lodged with ASIC via our website or by writing to any of our capital city offices across Australia at:
National Assessment & Action
GPO Box 9827
IN YOUR CAPITAL CITY
For further information contact:
ASIC Media Unit
Telephone: 03 9280 3354
Mobile: 0409 702 310