HOW MOST PUMP AND DUMP SCAMS WORK:
> A person sees an investment opportunity on social media
> The post uses the image of a well-known commentator, investor or financial institution to build credibility
> The opportunity is actually fraudulent, generated by the scammers
> The consumer clicks the post and is directed to a messaging platform such as WhatsApp
> A scammer impersonating the expert provides stock recommendations, often on foreign exchanges
> Fake investors, often part of the scammer’s team, post messages about their supposed profits to build credibility and reel the victim in
> The victim buys the recommended shares, causing the share price to rise (scammers often ask for screenshots or proof of purchase)
> The scammers suddenly sell their existing holdings at the inflated price, causing the price to collapse
> The victim is left holding shares worth significantly less than what they paid
WHAT TO DO IF YOU ARE SCAMMED:
- Call your bank as soon as you realise it’s a scam
- Seek support through ID Care if you need to recover your identity
- Help others by reporting scams to the Federal Government website, Scamwatch
Unfortunately, scammers are often overseas and out of reach of Australian law, the chances of getting your money back are very low, so being diligent is critical.
Source: ASIC
(Australian Associated Press)
