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The Princess Di lotto con

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Australia
Member #17096
June 11, 2005
225 Posts
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Posted: January 10, 2006, 6:36 pm - IP Logged

"PRINCESS DIANA never lost her capacity to smile, laugh and inspire others," the email reads.

And she has left you $3 million. To collect your winnings from a lotto set up by her estate, you are asked to please provide your name, address and employment details.

Do so, and you are likely to end up the victim of fraud, warns the Australian Securities and Investments Commission.

The Princess Di lotto con was the runner-up in the commission's annual Pie in the Sky Awards, recognising outrageous financial schemes that are too good to be true. The winner was a Sydney wealth seminar scheme. Pegasus Leveraged Options, run by Craig McKim, promised returns of 8 per cent a week. Ninety investors poured in $3.7 million.

The NSW Supreme Court later heard that $2.1 million fed McKim's gambling habit. Investigators traced $1 million to a betting shop in Vanuatu and $709,820 to a betting shop in Darwin. McKim was sentenced to eight years' jail.

"Pie in the sky financial schemes still devastate far too many people," said Delia Rickard, the commission's executive director of consumer protection.

"They frequently use sophisticated props and hard-sell techniques that lure even financially experienced people."

A survey by the ANZ Bank on the financial literacy of Australians found 85 per cent knew an investment promising a high return carried a high risk. However, almost half said they would invest anyway and see how it went. People aged under 25, and those with few savings, were more likely to be unaware of the higher risk, it was found.

Every year, the commission warns consumers that get-rich-quick schemes end in tears. "The internet has made it easier to get the scams out there at very little cost," Ms Rickard said. "It is difficult to tell how many people are being caught because people are embarrassed to admit it."

The Diana scam was like the Nigerian letter scam, which had "a million variations", she said.

A British Consumer's Association survey found 8 million people had seen material promoting cons like the Diana scam which required winners to pay a "release fee" to access their windfall.