Before you invest, it’s a good idea to do your research. This is particularly important if there are warning signs, or it’s a high-risk investment. Here are some steps we recommend you take:
Step 1: Find out the legal name of the business you’re dealing with
Search online to see if you can find the business’s trading and legal names. The legal name may be different to the trading name. If you’re unable to connect the two names easily, or it’s confusing, this could be a warning sign that the investment is a scam.
Step 2: Check the business/individual is regulated by the FMA
If you’re planning to invest, you must make sure you use a licensed provider. We monitor these providers and ensure they are meeting minimum standards of service. We have lists of individuals, markets and businesses licensed or authorised to operate in New Zealand.
Being ‘registered’ on the Financial Service Providers Register (FSPR) does not mean a business or individual is licensed or regulated by us or that they are based in New Zealand. If you use an unlicensed provider, it’s very unlikely you will recover your money if things go wrong, particularly if they are based overseas. Read more.
Step 3: If the business is not based in New Zealand, find out who regulates them
We only regulate financial services businesses operating in New Zealand. If you’re considering dealing with an international provider, make sure you find out who regulates them (usually by doing an online search). If in doubt, phone the overseas regulator to confirm the business is on their list.
If a business is not based in New Zealand it’s even more important you do your research before you invest. It’s often impossible for you to recover your money if an overseas investment turns out to be a scam.
We publish warnings from overseas regulators on our international regulator alerts page.
Overseas regulators can be faked. Don’t rely on links provided by the person you’re dealing with. Always do your own internet search.
|
Step 4: Check our warnings list
We publish an A-Z list of all the businesses and individuals we recommend you be wary of. If a business or individual is on this list, it means one or more of the following:
- they’re not registered as a financial service provider in New Zealand (and we’re aware of them)
- they’ve had the FMA take action against them for misconduct
- they’ve either not responded, or have not provided a satisfactory response to a request by us for information
- they’ve received a warning notice from the FMA.
We recommend you check our warnings list before dealing with a financial services business. It’s also a good idea to check other consumer protection websites, such as Scamwatch and the New Zealand Police.
Please be aware that many scams go unreported and are not listed on warnings pages here or overseas.
Step 5: Familiarise yourself with the hallmarks of scams
While scams can be hard to tell apart from genuine investment opportunities, there are some warning signs to look out for.
As a rule, the more you know about a business before you invest the better. Make sure you do some online research. It can reveal a lot about a business, including comments from other people who’ve had dealings with them, or warnings from other regulators. If anything is unclear or you don’t understand how the investment works, speak to a financial adviser before you invest.
Our free resources page has more information on ways to protect yourself, from ‘How to become a smart investor’ through to ‘Be wary of low-ball offers’.
Step 6: Watch out for further scams
If you’ve lost money through a scam, you’re highly likely to be targeted again. Be wary of follow-up calls from businesses offering to help you recover your money or threatening legal action if you stop payments. It’s likely to be part of the original scam or your details may have been sent to a different group of fraudsters. This is typical of boiler room or cold call scams.
If you think you've been scamed, you can report it to us.
