- ASIC Guidance
- Share Sale Fraud
- Investor Protection
ASIC updates INFO 237 to help AFS licensees combat a surge in identity theft and share sale fraud, urging greater vigilance and client protection.
ASIC Tightens Guidance to Combat Share Sale Fraud
Amid a worrying rise in share sale fraud cases linked to identity theft, the Australian Securities and Investments Commission (ASIC) has released updated guidance aimed at helping Australian financial services (AFS) licensees safeguard investors. The revised Information Sheet 237, titled Protecting against share sale fraud (INFO 237), reflects findings from an ASIC-led review into the onboarding and verification practices of AFS licensees.
What is Share Sale Fraud?
Share sale fraud occurs when someone impersonates an account holder to sell or transfer shares that do not belong to them. These fraudulent acts can wipe out entire investment portfolios and cause devastating financial and emotional distress to victims. ASIC warns that share sale fraud is on the rise and calls for heightened vigilance among financial service providers and investors alike.
Sevenfold Increase in Fraud Reports
According to ASIC Commissioner Simone Constant, the number of share sale fraud incidents reported by market intermediaries has increased sevenfold in just four years. “There are terrible stories out there, where in some cases entire investment portfolios are lost,” she said. “Share sale fraud can happen to anyone, at any time.”
Key Observations from INFO 237
ASIC’s updated INFO 237 outlines common fraud tactics used by criminals and recommends improved practices for licensees to prevent and detect fraudulent activity. These better practices include:
- Enhanced onboarding verification: Be vigilant when onboarding new clients. Look out for stock images, forged documents, and verify authenticity independently.
- Monitoring trading behaviour: Flag unusual trading activity, large withdrawals, or transactions from newly opened accounts for further scrutiny.
- Additional due diligence on changes: Conduct thorough checks when clients update personal or banking details, ensuring bank accounts match the client’s name.
Role of AFS Licensees in Prevention
ASIC emphasises that AFS licensees play a critical role in preventing share sale fraud. By implementing stronger verification systems and transaction monitoring, licensees can help reduce risk not only for their own clients but for the wider market.
Advice for Investors
Investors, too, have a role to play. ASIC recommends the following protective measures:
- Regularly review your share portfolio and account activity.
- Be alert to unfamiliar or suspicious transactions.
- Use multi-factor authentication on all financial platforms.
- Adopt passphrases instead of traditional passwords for stronger account protection.
Vigilance is the Best Defence
ASIC’s latest guidance is a wake-up call for the entire industry. With share sale fraud growing more complex and harder to detect, prevention and early intervention are essential. Both AFS licensees and investors must stay alert and adopt robust verification practices to safeguard their investments and identities.
Comments from our readers
Great initiative
It's reassuring to see ASIC taking such proactive steps to tackle share sale fraud. The rising incidents are concerning, and this updated guidance is a much-needed wake-up call for both financial services and investors. By enhancing their practices and staying vigilant, we can work together to protect our investments and identities. Well done, ASIC!
Unimpressive Response
ASIC's updated guidance feels like a token gesture rather than genuine action. Sevenfold increase in fraud cases, yet all they can offer are vague recommendations? It's disappointing that they still rely on AFS licensees to prevent this, when clearly more robust measures should be mandated. Investors deserve better protection than this half-hearted approach.
Share fraud awareness
This info is so important! It's wild how share sale fraud is rising. Definitely going to keep an eye on my investments and use those tips. Better safe than sorry, right? Cheers to ASIC for keeping us in the loop!
Great initiative
I truly appreciate ASIC's updated guidance on share sale fraud. It's important to see such proactive measures being taken to protect investors. The rise in fraud cases is alarming, and the recommendations provided for both licensees and investors are invaluable. Let's hope this initiative helps to make our financial ecosystems safer for everyone.
Fraud hits home
I once received a call claiming to represent my brokerage, trying to verify account details. Thankfully, I was cautious and hung up. This issue is serious!
Share fraud concerns
This is really alarming! I had no idea share sale fraud was on the rise. We definitely need to keep an eye on our portfolios and stay vigilant. Great info, ASIC!