When a fraud scandal hits the headlines, you might wonder – how could they abuse the financial trust of clients that way? Unfortunately, it seems that those committing financial fraud let greed get in the way of one reality: there are no victimless crimes.
What might seem like a few dollars misappropriated here and there can end up being the loss of hard-earned savings of everyday people.
So how do you protect yourself from becoming the victim of financial fraud? And is it possible to recover losses?
Potential warning signs of financial fraud
- Reduced communication
If a previously open and helpful advisor suddenly becomes silent, hard to locate or unhelpful, this can be a red flag that all is not well. Verbal and written statements should be regular, useful and fully transparent.
- Unexpected transactions
If you see a sudden rise or fall in your transaction balances and receive no acceptable explanation, seek immediate help to ascertain if some element of fraud is in play.
- Things just not adding up
Your hard-earned finances deserve just as much careful stewardship as the next person. If you are being told that your poor returns or tied-up funds are just victims of ‘these unprecedented times’ and this doesn’t seem to stack up, make sure you seek advice.
What can you do if you are a victim of financial fraud?
There are several potential avenues of redress. The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have a mandate to protect consumers where possible against the actions of fraudulent financial advisers and accountants. The Australian Financial Complaints Authority (AFCA) is a free service for consumers that deals with complaints relating to financial misconduct. There is also litigation through the courts.
If you have suffered losses as a result of financial fraud, talk to us about the best way forward.