Retirees hit by polished scams

ORGANISED crime gangs are targeting retirees with increasingly sophisticated scams that may have already cost thousands of elderly Australians more than $100 million.

By InvestSMART · 16 Feb 2012

By InvestSMART ·
16 Feb 2012

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ORGANISED crime gangs are targeting retirees with increasingly sophisticated scams that may have already cost thousands of elderly Australians more than $100 million.

The fraudsters are homing in on Australia because the economy rode out the global financial crisis comparatively unscathed.

Police and the Australian Crime Commission have told The Age that crime gangs are going to extreme lengths to ''backstop'' their scams by manning multiple phones with well-informed, convincing associates.

The commission - which has set up a joint taskforce called Galilee with state and federal law enforcement bodies - estimates that more than 2400 individuals, 800 companies and 51 superannuation funds have lost a total of $93 million to date.

On average, victims have lost about $130,000, with losses ranging from $35,000 to greater than $4 million.

The frauds are a further blow to retirees, many of whom saw the value of their superannuation plummet due to the GFC, and it is believed the cost is far greater than reported.

''Losses and numbers of victims are expected to rise considerably. To date the taskforce has focused on a small number of known fraudulent scams and related organised crime entities and the full extent of the crime is being determined,'' Australian Crime Commission chief executive John Lawler said.

The scams begin with a phone call, inviting the victim to invest in a scheme offering massive returns. The victim may then be directed to a website, which looks convincingly ''official''.

However, according to Australian Federal Police Assistant Commissioner Neil Gaughan, when the victim telephones numbers supplied by the criminals the sophistication of the schemes becomes apparent.

''When people have been de-briefed about why they fell for the scam, and you say: 'When this happened, why didn't you do this?' they say: 'We did, but they had a story that actually made it sound legitimate.'

''Then we'll say: 'Well, why didn't you do this after that?' and they say: 'We did, but they also had a covering story for that','' Mr Gaughan told The Age.

Although no charges have been laid, Queensland police have asked anyone who worked for the companies West Trade and Atlas Lead Generation, and any investors, to contact them.

doakes@theage.com.au

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Frequently Asked Questions about this Article…

What kinds of investment scams are currently targeting retirees in Australia?

Organised crime gangs are targeting retirees with sophisticated investment scams that usually start with an unsolicited phone call offering "massive returns". Victims are often directed to convincing, official-looking websites and then contacted through multiple phones manned by well-informed associates to make the fraud appear legitimate.

How much money have these retirement investment scams cost Australians?

The true cost is believed to exceed $100 million. The Australian Crime Commission’s taskforce estimates more than 2,400 individuals, 800 companies and 51 superannuation funds have lost a total of about $93 million so far, with average victim losses around $130,000 and individual losses ranging from $35,000 to more than $4 million.

Who is investigating these organised investment scams?

The Australian Crime Commission has set up a joint taskforce called Galilee with state and federal law enforcement bodies. The Australian Federal Police and Queensland police are also involved in investigations into the frauds described in the article.

How do scammers make their schemes seem believable to victims?

Scammers use multiple tactics to appear legitimate: they run professional-looking websites, provide scripted cover stories and staff several phones with convincing, well-briefed associates so that when victims check or call supplied numbers they are reassured rather than alarmed.

Why are retirees being specifically targeted by these schemes?

Retirees are being targeted because many are holding retirement savings and superannuation that became more attractive after the global financial crisis; fraudsters have homed in on Australia partly because the economy weathered the GFC comparatively unscathed, making retirement savings a lucrative target.

What warning signs should everyday investors watch for to spot a potential scam?

Be wary of unsolicited phone calls that promise unusually large returns, being directed to websites that look official but were linked from the call, and callers who provide multiple reassuring stories or well-prepared explanations when you try to verify details—these are tactics highlighted by police as part of the scam playbook.

If I worked for or invested with West Trade or Atlas Lead Generation, what should I do?

Queensland police have asked anyone who worked for the companies West Trade and Atlas Lead Generation, as well as any investors involved with them, to contact police. The article notes investigators are seeking information from former staff and investors.

Have any charges been laid in relation to these organised investment scams?

According to the article, no charges had been laid at the time of reporting, even as the taskforce continues to focus on a number of known fraudulent scams and organised crime entities.