The Barefoot Investor has warned a couple who claimed they made $11,000 in profit 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 their newfound wealth.
Rick said the couple started trading Contracts For Difference (CFDs) online with a company and began by making an initial $500 investment.
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 like shares.
Rick said in a letter published in the Herald Sun they made around $11,400 in profit in just four months after speaking to a broker in Switzerland for a few times a week.
‘We have done a withdrawal of $100 to see if we have ready access to the money, and it came through with no problems at all,’ he said.
Rick said their broker has since asked the couple to boost their earnings by investing a massive $152,509, which is equal to US$100,000.
‘We don’t have that kind of money, so he has suggested we set up an SMSF (self-managed super fund) and invest some of our super,’ he said.
Mr Pape urged the couple to stop investing in the scheme that is designed to steal people’s money.
‘Somewhere – your name is written on a whiteboard,’ Mr Pape wrote.
‘These scammers have got you on the hook…and now they’re attempting to reel you in’.
Mr Pape said scammers use these types of investments to target superannuation savings that Aussies have worked hard to save.
He pleaded for Rick to contact IDcare, which is and New Zealand’s national cyber support service, to protect their identity from scammers.
Investors, who trade CFDs, do not own the financial assets such as shares, stocks and cryptocurrencies they buy or sell.
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 they are purchasing a CFD contract.
n’s lost more than $2.7billion to scams in 2023 according to a report by the ACCC.
Investment scams claimed the most funds with Aussies losing more than $1.3billion.