Fake stock market tip scam becomes phone spam

The Australian Securities and Investments Commission (ASIC) has issued a warning to Australian consumers to beware of a new scam that has emerged in the US, which attempts to dupe people into buying stock in a company by leaving a bogus "wrong number" stock market tip on their answering machines.

The scam dubbed by the US as "pump and dump" involves an unknown caller leaving a message on the recipient's answering machine dictating to "his or her 'friend' about an excellent investment tip they have received".

ASIC said "while it seems unlikely that people would buy shares on the basis of a call like this, people across the US are falling victim".

Executive director of consumer protection for ASIC, Greg Tanzer, said the scam is an example of the "ever-changing tricks scammers use to target the community".

Tanzer adds that people are "actually employed" in the US to personally leave these messages on "thousands of answering machines across the country".

According to ASIC "the scammers are trying to influence people to buy stock in a company that they invest in" to trigger a rise in the share price, after which the scammer sells his or her shares at a profit leaving the other investors to risk losing their money.

"It appears that the scammers choose stocks that are only thinly traded and little is known about them, so the share price is easily manipulated," Tanzer said. "ASIC warns people never to invest money in shares on the basis of advice from people they don’t know."

"This advice should act as a warning not only to consumers but to scammers that ASIC is always looking for ways to prevent illegal practices and protect the community."