This can also often take the form of a cold call. A scammer claiming to be a stock broker or portfolio manager calls and offers financial or investment advice. They claim the investment opportunity they're offering, which is usually in overseas companies, is low-risk, but offers fast and high returns. These scams are often sophisticated to the point they'll have created fake websites and other material to back up their claims. They'll be persistent and may keep calling you back.
NOTE: It’s illegal to sell financial products through a cold call in New Zealand. If you’re contacted in this way, it’s likely to be a scam.
Another investing scam is when you're contacted by email or a message in a forum encourage you to buy shares in a company the scammer is predicting will increase in value. They'll stress the need to act quickly or miss out and the message will seem like an inside tip. The scammer is trying to boost the price of share, so they can sell shares they already own and make a big profit. The share price will then go down dramatically, leaving you with shares that are virtually worthless.
Steps you can take
- Politely say 'no thanks' and hang up the phone - they're likely to be persistent, so you may need to do this a few times.
- It might be tempting to engage them in conversation to try and 'trick' them or argue with them - don't do this as they may put you on a 'harass' list.
- If you're unsure whether you're talking to a scammer or a legitimate organsation, hang up and call the organisation using their official helpline number. Don't use contact number provided by them, or on websites or material they direct you to.
- If you're still unsure, get in touch with us on 0800 113 355 and we'll help you work if the contact is legitimate.