This as New Zealand celebrates Fraud Awareness Week 2023
The Financial Markets Authority (FMA) is alerting New Zealanders to the escalating threat of investment scams as part of the Fraud Awareness Week 2023.
Fraud Awareness Week 2023, which runs from Nov. 13-18, is focused on the critical theme of empowering consumers to avoid falling prey to investment scams – this as recent data from the Ministry of Business, Innovation, and Employment (MBIE) revealed that nearly $200 million has been lost to scams in the past year.
Investment scams on the rise
FMA reported a significant surge in investment scams in recent years, with more than 1,300 complaints and 373 warnings issued since 2020.
Fake investment prospectuses and deceptive term deposit comparison sites, in particular, have become increasingly sophisticated, catching even seasoned investors off guard.
The FMA was also concerned about scams increasingly targeting vulnerable communities and the proliferation of fake investments on social media platforms.
Combatting investment scams
As part of Fraud Awareness Week, FMA has collaborated with comedian Tom Sainsbury to visually represent the deceptive nature of investment scams.
Peter Taylor (pictured above), FMA director of specialist supervision and response and senior responsible officer for scam prevention and coordination, said scams and fraud cause terrible harm to people, and preventing these financial crimes is vital to supporting confidence in NZ markets and financial services.
“This week is an important moment to raise awareness around the impacts of fraud and the ways to protect yourself,” Taylor said in a media release. “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 and prevention measures
FMA advised everyone to be cautious and provided red flags to watch for:
- Verify the source's authenticity, ensuring the company is based in New Zealand with a local phone number and matching website URL
- Seek a second opinion before making any payments; consult trusted advisers, friends, or family members
- Be wary of unsolicited investment opportunities; legitimate institutions do not typically approach individuals out of the blue
- Exercise caution when sharing money or personal information; independently verify details and refrain from trusting links or emails
- Be attentive and heed your bank’s warnings or concerns regarding payment requests or money transfers; they may have witnessed other customers losing money in similar situations
- If the investment is unclear or confusing, it’s best to walk away
FMA offers a wealth of resources on its website to guide New Zealanders in safeguarding themselves against investment scams, including a list of public warnings. All alerts and warnings are shared on the FMA's social media channels, along with regular scam education content and safety information.
Stay informed by subscribing to FMA’s regular email updates featuring alerts and warnings here. To streamline the reporting of suspected scams, FMA has enhanced its web page accessibility, making it easier for individuals to report incidents here.
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