Case study investment scam
Malcolm and the persistent caller
Malcolm spent 6 weeks
trying to get an investment scammer to stop calling him. It all
started when he received a call from a guy claiming he was a
broker from the Kensington Group.
He offered Malcolm a great investment opportunity for a stock
called Interglobal Waste Management, which was soon to be listed on
NASDAQ. The broker spent an hour establishing his credentials and
the stock's expected rise in value. Malcolm was emailed information
on the company and directed to some websites.
A day later he got another call from the broker asking what he
thought of the information he had sent. Malcolm said he did not
want the stock as it was not the right investment for him. The
caller then spent the next 45 minutes 'hard selling' the stock to
To get the caller off the phone, Malcolm finally agreed to buy
$10,000 worth of stock. The caller promised the paperwork would be
sent to Malcolm and said the deal had to be settled within 48 hours
to meet the deadline.
After a sleepless night worrying about what he had agreed to,
Malcolm emailed the company to tell them he did not want the stock
and he was not going to transfer the money.
Later that day the broker called to tell Malcolm he was
missing a great opportunity and to ask Malcolm to 'do him the
courtesy' of explaining why he had pulled out of the deal. The
broker said he wanted to develop a long-term relationship with
Malcolm. He said once Malcolm had reaped the investment rewards, he
would want to give the broker more money to invest and friends'
names as referrals. The broker even told Malcolm that he was doing
the wrong thing by his kids by not taking up the investment.
Malcolm finally got the broker off the phone but a day later he
was called by a more senior broker who also wanted to know why he
had pulled out of the deal. The more senior broker claimed there
was an outstanding settlement for the stock. When Malcolm told him
he had already explained his reasons to the previous broker, the
more senior broker claimed the other broker was on leave.
Malcolm finally got rid of the caller but was called again by
various people in the Kensington Group over the next 6 weeks
asking him why he had not invested. He knew after this amount of
harassment that they were definitely scammers.
Malcolm was very glad he had not signed up to a deal with the
Kensington Group as he found their name on ASIC's list of companies you should not
deal with. The company was an overseas business not licensed by
ASIC and was operating illegally in Australia. Malcolm reported the
company to ASIC.
Last updated: 18 Apr 2017