Australian retired couple share their story of losing over $2.5 million in investment scam to warn others and push for reforms

The Sawyers wanted a safer way to invest money from their pension fund. But they were tricked into a complex investment scam and, in the end, entirely abandoned by their banks when they needed support most.

The couple hopes that going public with their case will draw attention to the shortcomings in current regulations and push lawmakers to enact reforms to better protect bank customers from scams. In Australia, the burden of scam losses overwhelmingly falls on victims, with banks typically reimbursing only a small fraction of their customers' losses, averaging between 2% to 5%.

Their experience is a lesson for everyone, showing how crucial it is to spot red flags and take steps to protect yourself from scams.

How the scam worked

The scam began with an ad on Google promising investment opportunities through 'St George Capital,' which claimed ties to the well-known St. George Bank, even bearing the familiar dragon logo of St. George Bank.

Kim and his wife clicked on the ad, left contact details, and received a phone call from a man who pretended to be a St. George Bank employee and even used the name of one.

Between July and September 2023, he builds a relationship with the couple, sharing personal information and being very friendly while guiding them to make transfers into accounts at Westpac, ANZ, Commonwealth Bank, and Bendigo Bank.

"He always said, you know, have a good weekend or have a good night," Kim says. "He mentioned that his wife was pregnant. We believed that we were dealing with St.George Bank."

Following his advice, Kim and his wife made no less than 26 transfers in the amount of $100,000 into accounts controlled by the scammers. He even convinced them to invest in what were claimed to be Commonwealth Bank corporate bonds offering a 9% return. However, the bonds they received via email, for which they paid over $1 million, turned out to be fake.

How they found out they lost their money

The Sawyers discovered they had lost everything when Macquarie Bank contacted them three months after the scam to tell them that their money was in the hands of a scammer. It was the only one of the banks involved to reach out, but by then, it was too late to prevent the losses, and Macquarie Bank had declined to reimburse any of the $850,000 lost.

When the couple asked the other banks involved - Westpac, ANZ, Commonwealth Bank, and Bendigo Bank - for information about the accounts controlled by the scammers, they received no assistance. The banks responded that all funds had been withdrawn and could not match the accounts with specific individuals.

In the end, none of the eight banks involved have agreed to reimburse their share of the millions lost.

Not a too-good-to-be-true offer, but other red flags

Usually, scammers lure victims with offers that seem too good to be true, but in this case, the promise was more realistic: capital preservation, protection from market fluctuations, and a guaranteed return of up to 6.5%.

Did you know?

Scammers often use "mule accounts" to transfer funds, which involves using legitimate bank accounts of individuals not directly involved in the scam, known as money mules, and compensating them with a portion of the proceeds.

However, looking back, the Sawyers recognized several warning signs that something might be amiss:

• Emails sent to generic St.George addresses frequently bounced back.
• Login details provided by the scammer for an "online client portal," where the Sawyers could supposedly monitor their investments, repeatedly failed.
• The email addresses used to send confirmations of money transfers were fake St. George Bank addresses, like [email protected] or [email protected].

Eight tips to protect yourself from falling victim to investment scams

1. Verify who you are dealing with. Research any investment opportunity and verify the legitimacy of the company or individual offering it by contacting the company through its official channels (website, app).

2.  Understand the investment: Take the time to understand the product offered, including its risks, terms, and potential returns. Only transfer money after confirming the advisor's credentials and the investment details.

3.  Watch out for pressure tactics: Be wary of anyone pressuring you to make a quick decision or urging you to keep the investment confidential. Legitimate investments allow you time to consider your options.

4.  Secure Online Accounts: If investing online, ensure your accounts have strong passwords and enable two-factor authentication for added security. Avoid sharing sensitive information over unsecured channels.

5.  Stay Informed: Stay updated on common investment scams and tactics used by fraudsters. For example, you can check for the latest scams & alerts on the financial institution webpage. Some of them present recent scam examples reported to them.

6.  Seek advice and a second opinion: Consider consulting with an independent, licensed financial advisor or investment professional before making any investment decisions. Or talk to friends and family, they can provide valuable guidance and help you avoid scams.

7.  Run ads, messages, emails, and QR codes through Bitdefender Scamio. Bitdefender Scamio is the next-gen AI scam detector that helps you check any phishing email, tricky message, or fake ad in seconds. You can copy-paste the message, upload an image, send a link, or describe your situation. Scamio analyzes it and informs you if it's safe or not.

8.  Report Suspected Scams: If you believe you've encountered an investment scam or have been a victim of fraud, report it to the relevant authorities, such as your country's financial regulator or consumer protection agency, and consider seeking legal advice. Reporting scams can help prevent others from falling victim and may aid in recovering lost funds.

Stay informed, stay cautious, and check twice when it comes to investing your money.