Hamilton, November 14, 2023
The Financial Markets Authority (FMA) is reminding New Zealanders to remain vigilant to investment scams as part of Fraud Awareness Week 2023.
Fraud Awareness Week 2023 runs from November 13 to 18, 2023 and this year’s focus is about encouraging consumers not to fall victim to investment scams after $198 million was lost to scams over the last year according to 11 New Zealand’s largest financial institutions.
The figures were released by the Ministry of Business Innovation and Employment (MBIE) as a part of the Fraud Awareness Week 2023.
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.
This year’s efforts are focused on encouraging consumers not to fall victim to investment scams. A joint social media campaign featuring psychologist Nigel Latta has been created by MBIE and the Banking Ombudsman Scheme. The FMA has also created a social media campaign, in partnership with comedian Tom Sainsbury, illustrating 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 said, “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 the FMA should take a lead role in developing a system-wide response to this scourge.”
Small Businesses at risk
Nationally, small businesses are also a growing target for scams. NetSafe has said that the number of New Zealand small business incidents has tripled compared with the 140 they received last year.
In 2014, 35 victims lost $788,253 to scams, giving an average incident loss of $22,521.
General Manager of Competition for the Commerce Commission, Kate Morrison has seen an increase in scam-related complaints with 88 last year, compared with 50 the year before.
“There are lots of devastating stories of people losing money to scams. Many of these scams originate from overseas which makes it almost impossible to recover the money and much harder for agencies to disrupt. That is why raising awareness of scams and how to avoid them is important. We advise people to not be lured into an overly attractive offer before checking that it is genuine. If in doubt, just say no” she said.
“Scammers are always coming up with new and sophisticated methods to trick consumers into handing over their money or personal information, especially with today’s technology. We know that small businesses have been a particular focus of scams, so we are pleased to support the theme this year and provide additional resources for consumers and small businesses to find information to assist them in protecting themselves from scams,” Ms Morisson said.
Too good to be true
MBIE spokesperson for Fraud Awareness Week Ian Caplin said that scammers are targeting everyone across New Zealand, especially those with savings or investments who are looking to earn a little bit more from their money.
“It is important to remember that real investments do not just come out of the blue. If it seems too good to be true, then it probably is. If you receive unsolicited investment offers via email or through a ‘cold call’, ignore it. It is illegal to sell financial products through these methods in New Zealand. Investors can contact institutions directly through contact details on official websites to verify documents and payment instructions before sending any money. The FMA website also contains details of warnings and real-life examples of scams,” he said.
“If you think you have been scammed, stop all contact with the scammer. Do not make any more payments and contact your bank immediately. Report all investment scams to the FMA, and scams in general to CERT NZ to stop others falling victim. If you do not understand it, walk away. Before you make any investment, understand how the investment works,” Mr Chaplin said.
About the Fraud Awareness Week
Fraud Awareness Week is run by MBIE in its role as chair of the Inter-agency Fraud Awareness Group. The Interagency Fraud Working Group includes members such as MBIE, CERT NZ, Netsafe NZ, the Serious Fraud Office, Retirement Commission, The Financial Markets Authority, DIA, the Police, the Banking Ombudsman Scheme, the New Zealand Telecommunications Forum and representatives from the banking industry.
In addition to Fraud Awareness Week, the team collaborates with government agencies, non-governmental organisations (NGOs) and the private sector on the Interagency Fraud Working Group to inform consumers and businesses about scams in New Zealand, work on interventions and share insights. They also ensure people who have been affected by scams find the most appropriate place to get help. They also work on operational and system enhancements to better protect consumers from scams.
Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.