The Australian Securities and Investments
Commission (ASIC) revealed that it convinced 233 people to part with
more than A$4 million over the Internet during an April Fools Day joke.
The fake Internet investment site, set up by ASIC on April
1, told would-be investors it was a sure thing they would triple their
money in 15 months if they invested in Millennium Bug Insurance (MBI).
The site claimed MBI was offering blue chip companies insurance against
losses from the Year 2000 Millennium Bug and because the Millennium Bug was
considered to be high risk, the insurance company would be able to charge
high premiums, giving investors a good rate of return.
Over 10,200 people visited the fake site during the past month, 233 people
committed themselves to $10,000 and $50,000 investment packages and 1,212
people asked for more information about the investment.
ASIC chairman Alan Cameron, said this shows how willing people are to part
with large sums of money without finding out anything about the company
they are giving their money to.
“We chose the Internet as this year’s April Fools Day investment scam
because some people, who might normally question the validity of an
investment offer, seem to think that offers on the Internet come with some
authority.”
“They don’t! Taking advice over the Internet is the same as
taking advice from someone on a street corner. Handing over $50,000 on the
Internet is the same as handing over $50,000 to someone on the street,”
Cameron said.
The ASIC points out that the first and best protection against fraud is
remaining sceptical about offers which look too good to be true.
Cameron said steps people could have taken to protect themselves would
have been to visit the ASIC Web site where a search would have revealed
there was no company called MBI and no prospectus lodged for this investment scheme.
All those who fell for the scam will receive a return email from ASIC
explaining the April Fool’s Day joke as well as advice on how to protect
themselves in future.
The exposure of the ASIC Internet scam comes hot on the heels of the
Commission’s recent formation of a new electronic enforcement unit, set up
to uncover and take action against Internet investment fraud.
