The Barefoot Investor has warned a couple who claimed to have made $11,000 in profits through a high-risk investment that they have been scammed.
Scott Pape, 46, said the couple should stop investing in the Ponzi scheme after a man wrote to him to share the story of his newfound wealth.
Rick said the couple began trading contracts for difference (CFDs) online with a firm and started by making an initial investment of $500.
CFDs are a contract between an investor and a CFD provider that allows the investor to predict the value or price movement of a financial asset, such as a stock.
Rick said in a letter published in the Herald of the Sun They made around $11,400 in profits in just four months after talking to a broker in Switzerland a few times a week.
“We made a withdrawal of $100 to see if we could access the money immediately, and it arrived without any problems,” he said..
Rick said his broker has since asked the couple to boost their profits by investing a whopping $152,509, which is equivalent to $100,000 US dollars.
“We don’t have that kind of money, so he suggested we set up an SMSF (self-managed retirement fund) and invest some of our money,” she said.
Scott Pape (pictured) has warned a couple who claimed to have made $11,400 in profits after they began trading Contracts for Difference (CFDs) online that the investment is a scam.
Mr Pape urged the couple to stop investing in the scheme which is designed to steal people’s money.
“Somewhere, your name is written on a blackboard,” Pape wrote.
“These scammers have you trapped…and now they’re trying to trap you.”
Pape said fraudsters are using these types of investments to steal the retirement savings that Australians have worked hard to save.
She asked Rick to contact IDcare, Australia and New Zealand’s national cyber support service, to protect her identity from scammers.
Investors trading CFDs do not own the financial assets, such as stocks, securities and cryptocurrencies, that they buy or sell.
Mr Pape said fraudsters are using these types of investments to steal the retirement savings that Australians have worked hard to save (file image)
CFD contracts are legally binding and investors will lose their money if the financial market they are betting on goes against them.
Investors must also pay transaction costs and other fees to a CFD provider when purchasing a CFD contract.
Australians will lose more than $2.7 billion to scams in 2023, according to an ACCC report.
Investment scams claimed the lion’s share of funds, with Australians losing more than $1.3 billion.