ASIC warns Aboriginal communities of get rich quick schemes

Source: ASIC Media Release - CA07-13

ASIC has urged consumers from Aboriginal communities to look out for potential scams following concern over an investment scheme that appeared to target communities on the south coast of New South Wales.

ASIC’s warning follows the unearthing of a scheme that proposed investors join a revolving wealth creation scheme that would see them divided up into groups to invest funds every week for three months, then each take turns to dip into the accumulated money pool. Promises made by the scheme included turning ten dollars into $1000 or more.

ASIC viewed this proposed scheme as being illegal under the Corporations Act as each ‘membership’ would have amounted to a unit in an unregistered managed investment scheme. ASIC’s enquiries found that the scheme never got off the ground but we are concerned that Aboriginal communities may be especially vulnerable to promoters of illegal schemes who promise large returns from affordable weekly contributions’, ASIC Executive Director of Consumer Protection, Mr Greg Tanzer said.

'ASIC is committed to ensuring that any investment schemes or scams targeting particular community groups are stopped before any investors join up.’ ASIC encourages all potential investors to carry out safety checks before investing their money. If the investment does not pass the test then these schemes should be reported to ASIC.The safety checks are:

- Search ASIC’s database to see if the company managing the investment holds an Australian financial services licence and is registered.

- Check ASIC’s list of illegal investments available at http://www.fido.gov.au/.

- Ask the seller for their product disclosure statement. This document must clearly and concisely set out information about the product.

Further, ASIC has established a toll free number (1300 365 957) to assist Indigenous consumers with any queries.

Additional information for Indigenous consumers and investors as well more information regarding scams and illegal investments schemes can be found at ASIC’s consumer website, http://www.fido.gov.au/.