Don't rely on sports tipping services or betting software to help you pick a winner this Spring racing season, a multi-agency taskforce has warned.
The ACCC has been working with the Queensland Office of Fair Trading, Queensland Police, the Australian Securities and Investment Commission and the Australian Taxation Office to develop coordinated enforcement and consumer education strategies to tackle these types of sports investment scams.
"Often peddled as investments, these schemes simply cannot deliver and odds are you will kiss your money goodbye - and quickly," ACCC deputy chair Peter Kell said.
"At a time when having a flutter is on everyone's mind, this is a strong warning from a multi-agency taskforce that has been cracking down on such schemes.
"These schemes claim that they can always pick a winner. Their spiel is they will analyse the data and do all of the work for you.
"Consumers think they are making a savvy investment, based on bogus forecasts for strong profits and steady income. Despite claims of 'tax free wealth', 'strategic investment', 'recession proof' or even 'investing in the thoroughbred racing industry'–these schemes are not investment opportunities - they are gambling. In some cases, the sole intention of the operator is to take your money and run.
"If these systems really worked, bookies would have locked up the copyright a long, long time ago," Mr Kell said.
Mr Kell's call was endorsed by Queensland Minister for Fair Trading Peter Lawlor who reiterated that the scams were simply designed to take the money from unwitting consumers.
"Like the old saying goes, if it seems too good to be true it probably is. Don't let these scammers take your hard-earned money," Mr Lawlor said.
Queensland Police Det Superintendent Brian Hay said "investing in these types of businesses is highly risky. Upon closer inspection many of these schemes are just another form of advance fee fraud or mass marketing fraud."
In September, the taskforce members from the ACCC, Queensland Office of Fair Trading and Queensland Police conducted a second round of visits to the registered offices of 18 sports 'investment' businesses.
"Only a handful of businesses were found to be operating at their registered address," Mr Kell said.
"It's clear that the operators of these schemes do not want to be found. The tricks used include:
- giving customers false addresses
- operating from a PO Box or renting short-term 'rent by the hour' office space
- moving the actual operation to a new location every six months and disconnecting the old telephone numbers
- phoenixing into a new company and abandoning the old, and
- using aliases.
"The bottom line is that consumers have no idea of who they are giving their money to or where the business is really operating from. We even found one business which demanded its staff sign a contract agreeing to never disclose the real address," Mr Kell said.
The clear intention is to do a runner long before a customer knocks on their door asking for a refund. The operators of these schemes use highly skilled telemarketers, who are told to be relentless and to say what ever it takes to 'close the deal'.
Mr Kell said consumers who are sceptical are often told they can 'try before they buy'. During the trial period, the consumer's online account will always show significant profits.
"Unfortunately these profits aren't real and will disappear, along with any customer support, as soon as the consumer hands over many thousands of dollars to buy into the scheme."
The further intelligence gathered from the joint operation will be used to assist agencies in considering what compliance and enforcement actions may be appropriate against the schemes operators.
Det Superintendent Hay said the Queensland Police will continue to work with their partners from ACCC and OFT and other agencies to combat this type of fraudulent activity.
These new "investment" schemes were also highlighted recently at the National Advance Fee Fraud Symposium hosted by the Queensland Police Fraud and Corporate Crime Group on the Gold Coast.
"Any potential investors who are cold called are advised to seek professional advice before paying large amounts of money up front for what is at best gambling," Det Supt Hay said.
Queensland Police has a web page to assist the public in providing information specific to arbitrage sports investment schemes. To pass on information about these schemes contact Crime Stoppers on 1800 333 000 or visit the online information reporting system at http://www.police.qld.gov.au/SportsArbitrage. The ACCC's sports investment scams factsheet is available on the ACCC's website or by calling the ACCC Infocentre on 1300 302 502.