Kia ora – it’s Money Month this month and as part of the FMA’s contribution we’re focusing on scams – particularly those investment scams that have led to Kiwis losing a lot of money – we’re talking retirement savings, house deposits and hard-earned savings being stolen by overseas criminals.
We’re speaking to Sam McGuire, the FMA’s Regulatory Services manager. She sees a lot of the scam complaints that come in and she’s got some good advice for keeping safe.
Q: Kia ora Sam, we’ve seen a lot of stories about some pretty sophisticated scams with huge sums of money being lost – are there any key themes, or new types of scam that we’re seeing?
Kia ora, look scams have been around for a long time, we’ve all heard of the common ones, whether it’s romance scams or fake inheritance scams or many just involving a payment before something else can happen – such as helping someone get into the country, a tax payment, a visa or some charge to release funds.
Scams are certainly not new, but they are evolving. With technology they are getting harder to spot – it’s all not massive lottery wins and Nigerian princes these days– but what we’ve been seeing here recently at the FMA is a big jump in phony investment scams. Where people think they’re putting their money into a well-respected bank or financial institution.
It could be buying environmental bonds – a high yielding return or some form of term deposit.
People are convinced this is the real deal, through the use of known international brands, sophisticated websites – fake but authentic looking documents, call centres and friendly sounding, well-spoken professional investment advisers, the money is deposited into a New Zealand account creating further legitimacy – but then it’s sent overseas quickly, almost immediately – often never to be seen again.
Q: How do these scammers find their potential victims?
Look we know it’s tough out there and everyone is trying to stretch their hard-earned money further.
As such, people are looking for the best return: the best bang for their buck.
So within the investment scams, we’ve noticed that some of the victims have been using interest rate comparison websites: putting information into them about how much they’re interested in investing, their email address and phone numbers.
The information then finds its way straight into the hands of the scammers who will contact the victim and offer investments and opportunities.
Q: Are the victims of these scams especially gullible people or naïve, is there anything that sets them apart?
Look - we are all potential victims. Nobody is immune to this – this is an opportunistic and targeted crime.
We’ve also got to remember, this is international organised crime – they’ll use all the tools available to social engineer the victim into becoming a party to the scam.
Look we’re all vulnerable to these sophisticated operations – they will certainly talk to you at different times, they’ll take you they’ll make you think you’re actually directing the whole exchange, they’ll make you think you’re in charge of the whole opportunity but you’re actually being expertly manipulated.
So that moment your guard is down – also when you’re actively looking for those investments – as I said one of the sources has been the victim’s own research which has made them vulnerable.
So if particularly you’ve come into a nest egg or you’ve got some hard-earned money – you may be feeling a little bit bullet proof because you’ve got some money in the bank – but you’re also vulnerable to those opportunities.
So today our message is just take a Pause – stop a bit, get advice, run it past a trusted friend, colleague or adviser – it applies in all these situations and it’s a good common sense approach.
This is your moment - Stop here and pause.
Check with the institution you think you’re investing with – Google them, ring them, email them yourself – but whatever you do, do not use the links, the numbers, the credentials they’ve given you please do your own research.
It’s also a good idea to tell someone what you’re doing – you know, tell the story and sometimes that lightbulb moment will come on for you while you’re telling that story.
It could be a friend, a family member, a work colleague – a trusted adviser. I know people like to keep their money matters private but once you start telling that story, you might find that the things that you’re hearing – it doesn’t sound true when you’re actually repeating it to a third party – and if someone is actually engaging with you and saying, ‘hey this just doesn’t sound right’ Stop – take that pause and listen.
Another set of eyes or another set of ears might make you think twice and give you the opportunity to see the red flags that you may have missed because you’ve listened to the story and been caught up in the scheme.
We’ve seen many occasions where the simple pause and question has saved someone from losing not only hundreds but hundreds of thousands of dollars.
Here at the FMA we publish warnings continuously throughout the year, of websites and organisations that are likely scams – check these out on our website - it won’t cover everyone out there and we don’t cover everyone up to no good, but it will give you a good indication of the major scams that we’re seeing and also the type of scams and things you should be on alert for.
Thanks Sam, that’s Sam McGuire and that’s another 5 Mins with the FMA. There’s more about scams with latest warnings and alerts on our website at fma.govt.nz.
We’ll bring you more FMA insights next month, until then hei kānō mai – bye for now.
