Pump and dump scams: how they work

HOW MOST PUMP AND DUMP SCAMS WORK:

* The person sees investment opportunities in social media

* The post uses the image of a well-known commentator, investor or financial institution to establish credibility

* This deal is actually a scam created by scammers

* Consumer clicks on the post and is directed to a messaging platform such as WhatsApp

* A fraudster impersonating an expert offers stock recommendations, often on foreign exchanges

* Fake investors, often part of the scammer team, post messages about their supposed profits to establish credibility and deceive the victim

* Victim buys recommended shares, causing share price to rise (scammers often ask for screenshots or proof of purchase)

* Fraudsters suddenly sell existing assets at a high price, causing the price to fall

* The victim holds shares worth much less than what he paid for them

WHAT TO DO WHEN YOU ARE CHEATED

* Call your bank as soon as you realize there is fraud

* If you need to recover your identity, seek support through ID Care

* Help others by reporting scams to Scamwatch

*Unfortunately, scammers are often overseas and beyond the reach of Australian law

*Your chances of getting your money back are very low

Source: ASIC