Tim Wells
Auckland, August 28, 2024
In an era where technology is rapidly evolving, the Financial Markets Authority (FMA) has issued a stark warning about a new wave of investment scams leveraging deepfake technology. These scams can be incredibly convincing, employing fake news stories and political endorsements to lure unsuspecting investors. Here are the key takeaways from the FMA’s warming:
Understanding Scams
Deepfake technology uses artificial intelligence to create hyper-realistic videos, often featuring well-known public figures. Scammers use these videos to promote fraudulent investment opportunities, making their offers seem legitimate and trustworthy. They may include shocking statements, such as pension payments will be cancelled or retirement age has been brought forward.
Peter Taylor, an FMA spokesperson, says, “It can be very difficult to detect that some of these news stories are fake; they have the exact look and feel of legitimate online news content but they are actually paid advertisements, used to alarm people, gain attention, and get them to click on a link for more information. The use of political leaders’ faces and deepfake videos to boost these claims is a particularly worrying development.” These scams are becoming increasingly sophisticated, often leveraging fake online news stories featuring well-known public figures to attract attention. A recent example involves a New Zealand woman who was deceived by a fake celebrity endorsement ad. While scrolling through Facebook, she encountered an advertisement that appeared to feature Jacinda Ardern and her husband, Clarke Gayford, promoting a crypto trading platform.
Drawn in, the woman followed the link to the platform’s website. The site seemed professional, and after some quick research, she deposited money via her credit card. However, after receiving several suspicious calls from the company, she began to have doubts. After consulting with family and reflecting on a few red flags that she noticed in hindsight, she conducted further research and ultimately discovered through the FMA website that the platform was a scam. Fortunately, she acted quickly, cancelled her credit card, and seems to have avoided further financial loss.
Recognise Red Flags
Staying vigilant against deepfake scams involves watching out for key red flags: unsolicited offers, deals that seem too good to be true, pressure tactics, and difficulty verifying the legitimacy of an investment or the people behind it.
To protect yourself:
Research: Investigate thoroughly before committing and verify credentials using reliable sources.
Seek Advice: Consult with a licensed financial adviser to get personalised guidance.
Be Sceptical: Don’t engage with unsolicited offers without verifying their authenticity.
Stay Informed: Regularly check for updates and alerts from regulatory bodies like the FMA.
As we navigate the digital age, it’s more important than ever to stay informed and vigilant against investment scams. This experience serves as a cautionary tale, highlighting the importance of thorough research and quick action when something seems off.
By staying informed and seeking professional advice, you can confidently navigate the investment landscape and protect your hard-earned savings. If KiwiSaver is on your mind, National Capital’s Healthcheck offers free specialist advice.
Read the full story on the FMA’s website here
Tim Wells is a Senior Financial Consultant at National Capital Limited, a financial advisory firm providing KiwiSaver investment advice. National Capital is a subsidiary of Saturn Portfolio Limited and sister company of Saturn Advice Limited and Saturn Invest New Zealand Limited.
The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
