FMA issues warning amid rising scam reports

How can one avoid scammers?

FMA issues warning amid rising scam reports

The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko - is once again calling on New Zealanders to be vigilant as reported investment scams this holiday season are on the rise, a news release said.

“Whether it’s an investment scam, phishing, impersonation or a dating scam, we encourage all New Zealanders to remain extra vigilant this summer holiday,” said Peter Taylor, senior responsible officer for scam prevention and co-ordination at the FMA. “We also remind New Zealanders that there are plenty of well-regulated investment products available from legitimate financial providers, where their money is subject to the protections of the Financial Markets Conduct Act and the FMA’s supervision of these products and providers.”

The agency has become concerned about the spike in the number of reported scams despite their warnings. It said there was a marked increase in complaints from the public when it updated the improved “Report a Scam” function on its website. Of the 331 scams reported, 184 have come since the update compared to the 211 scams reported to the agency in 2022.

Spotting a fraudulent offer

The FMA has published five warnings about scammers pretending to be from financial institutions and offering term deposits and bonds. The agency said the quality of the documents they send out is becoming increasingly sophisticated, and the interest rates they offer look realistic although are marginally higher than legitimate offers. They noted some are impersonating international and overseas companies.

People are being led to these scams using fraudulent investment comparison websites, the FMA said, and they featured this kind of activity in their previous warnings. The agency said people typically provide their information, including name, phone number, and email address, when searching for information on available interest rates. The scammers use this information to contact the person, claiming they work for a bank or financial institution. Then they email the person the false documents with links to impostor websites.

The FMA has shared tips on how to identify scammers:

  • Check the site you’re using is genuine. Make sure the company is based in New Zealand, has a New Zealand phone number and the website URL matches the company.
  • Do not respond to links, emails or contact details supplied by callers. Check for yourself with the bank or contact the institution through obtaining a creditable source for the contact information.
  • Banks and fund managers are licensed and regulated and will not call you out of the blue, offering a new opportunity that demands you immediately send them money.
  • Pay attention, listen to your bank when it raises questions or concerns about your payment requests or money transfers – they will have seen other customers lose money responding to a similar opportunity.
  • Talk 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.

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