The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko - is reminding New Zealanders to remain vigilant to investment scams as part of Fraud Awareness Week 2023.
Fraud Awareness Week 2023 runs from 13-18 November and this year's focus is about encouraging consumers not to fall victim to investment scams. Nearly $200 million of New Zealanders money has been lost to scams in the last year, figures from the MBIE show.
There has been a significant rise in the number of investment scams targeting New Zealanders in recent years. Since 2020, the FMA has received more than 1300 complaints and issued 373 warnings about investment scams. Two common types of scams targeting New Zealanders lately are fake investment prospectuses and term deposit comparison sites. These scams are becoming increasingly sophisticated and have caught out experienced investors. Also, of particular concern to the FMA is the increase in scams targeting New Zealand's vulnerable communities and the advertising of fake investments on social media platforms.
As part of Fraud Awareness Week, the FMA has partnered with comedian Tom Sainsbury to illustrate what investment scams can look like.
FMA Director of Specialist Supervision and Response and Senior Responsible Officer for Scam Prevention and Co-ordination Peter Taylor says: "Scams and fraud are financial crimes that cause terrible harm to individuals. Preventing these crimes is vital to support confidence in our markets and financial services. This week is an important moment to raise awareness around the impacts of fraud and the ways to protect yourself. The FMA raised this issue to the top of our agenda this year and recently the heads of the Council of Financial Regulators agreed that FMA should take a lead role in developing a system wide response to this scourge. We are looking at ways to achieve greater coordination and cooperation around tackling these issues. We are also talking with industry groups on the same theme to encourage more coordination in the private sector with Government agencies."
Red flags to watch for and ways to avoid being scammed include:
- Check the source to make sure it's real. Make sure the company is based here, has a New Zealand phone number and the website url matches the company.
- Get a second opinion before handing over money. Press pause and think hard before handing over any money. Check with a trusted adviser, friend or family member - often all it takes is a fresh set of eyes to raise red flags you may not have considered.
- Real investments don't come out of the blue. Banks and fund managers are licensed and regulated and do not generally call you out of the blue, offering a new opportunity that demands you immediately send them money.
