Fake websites fool investors

The Australian Securities and Investments Commission (ASIC) has warned Australian investors to beware of websites claiming to represent international regulators.

Greg Tanzer, executive director of consumer protection at ASIC, said phoney websites were being used to fool prospective customers that online investments were genuine chances to make money.

The degree to which some websites went to impersonate actual regulators could be surprisingly elaborate, he said.

"Set up by fraudsters, fake regulator websites are part of the elaborate window-dressing designed to trick Australian investors into buying worthless shares from unlicensed, overseas-based stockbrokers," said Tanzer.

ASIC said it had been alerted to the problem by complaints. Some people had lost money after being tricked by a fake website.

Tanzer said that, as part of the ploy, the fake regulators created official looking websites and organised phone numbers answered by staff who pretended to work for the fake regulator.

"ASIC repeatedly advises Australians to only invest through licensed Australian financial services businesses. That way, you are much better protected if anything goes wrong," Tanzer said.

He suggested one way people could check whether an overseas share market regulator really existed was to visit the International Organisation of Securities Commission website at http://www.iosco.org