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 Malcolm.

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.


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Last updated: 13 Oct 2016