Investment scams

Trish Oakley 
November 2023 

My kids think I worry too much, I think they worry too little.  Normally that means it’s time to sit down together and find the middle ground but on this occasion, I am not keen to budge too much.  I watch them navigate the internet with a relaxed confidence that all will be fine, however life experience tells me being prudent and cautious is wise. 

It was recently Fraud Awareness week (13-18 November) and particular emphasis was on vigilance around investment scams.  Rightly so.  MBIE has recently reported New Zealanders have lost nearly $200 million to said scams.  In anyone’s book that is a lot of hard earned savings disappearing.

The challenge today of course is the sophistication of technology and our increasing reliance on it in our daily lives.  Sure it brings loads of benefits; we have wonderful human connections, greater efficiencies, enhancements in medicine, science, quantum computing and a whole new world of possibility around artificial intelligence.  Sounds wonderful doesn’t it?  Then suddenly you realise that the emails advising you that some distant relative has died and left you a gazillion dollars have been replaced by text messages telling you of your failure to pay your car licence or road tolls (how many cars do they think I own?).  Courier packages you have never ordered are apparently waiting for you one click away, romance scams abound and identity theft is real.  Now to complicate our online lives even further, investment scams are smart charming individuals totally comfortable taking your hard earned savings via cold call and sophisticated online platforms that look like the real deal.

Last week the Financial Markets Authority noted the rise of investment scams targeting Kiwis.  Since 2020, they have received some 1300 complaints about scams.  Their communication recorded two common scams being fake investment documents and term deposit comparison sites.  I recently attended a presentation where screen shots of fake sites were shared and it was easy to see how even an experienced investor might be caught out.  These scams are not just targeting people with limited online experience or those who are busy and not paying attention, indeed with technology constantly advancing, anyone can be vulnerable (more on that below).

So how do you keep yourself safe from those with nefarious intent?  Sometimes it is just time to go back to basics. 

Let’s start by thinking about the operating environment for financial services.  It is highly regulated and offers for investment must follow prescribed rules.  Documents are filed on the Disclose register and this is a great place to check investment opportunities received for legitimacy. Up front it tells you that Disclose is “A register for offers of financial products and managed investment schemes under the Financial Markets Conduct Act 2013.”  Can’t find information on Disclose about what you have been sent on email or received in a cold call?  Then take a moment to get a trusted second opinion.  Phone your Financial Adviser using the contact details you have previously communicated with them on, speak to your accountant or lawyer or reach out to a trusted family member or friend.  Simply put, pause before engaging further, no matter how amiable and professional the person comes across or how great the website they shared looks. 

Maybe you don’t feel comfortable discussing your finances with others or are wondering why your own Financial Adviser has not alerted you to this great opportunity.  If this is the case, ask yourself how you received the information in the first place and is it someone or a business you know and trust. 

Remember in New Zealand, it is illegal to sell financial products off the back of a cold call.  Can you independently verify who contacted you through an online search?  Do the name and contact details match the legitimate business website.  Does the website address align to the business name?  Look for small typos that our eyes want to skip over but when read slowly you realise something isn’t quite right.  Run the website address through NetSafe’s checker: www.checknetsafe.nz.  This site performs a series of checks and reports back to you how the web address has measured up against the same and can provide some confidence around legitimacy of the web address.

Sadly today not everything online is fine and cautiousness is what can keep our hard earned savings safe.  So unfortunately for my children, that means dinner time conversations on prudency will continue.  Joy I hear them say, but as someone who has recently been spoofed, it is necessary.  Remember my comment above on how anyone can be vulnerable? I now find someone trying to impersonate my phone number in order to scam people out of details, in my case immigration rather than financial matters.  That is spoofing.

I was only made aware due to two callers pausing and checking, reaching out to me to ascertain if this was legitimate and to alert me to the scam.  I am grateful to our IT team who have been assisting me alongside gently coaching on the realities of life online. They remind me that bad actors, as cyber specialists like to call them, abound.  Simply put their profession is to scam you.  They will be rewarded for the same so don’t let that reward be your hard earned savings. 

Pause, independently verify and think twice.  If it sounds too good to be true then it probably is.

If you want some tips on how to keep your Summer account safe visit our page here.

This is not a recommendation to buy or sell any financial product and does not take your personal circumstances into account. All opinions reflect judgement on the date of communication and may change without notice. We recommend you take financial advice before making investment decisions. We have prepared this web page in good faith based on information obtained from other sources, but we do not guarantee the accuracy of that information. We do not make any representation or warranty (express or implied) that this web page is accurate, complete, or current and to the maximum extent permitted by law disclaim any liability for loss which may be incurred by any person relying on this web page.