Common investment scams
It’s illegal to sell financial products through a cold (unprompted) call in New Zealand. If you’re contacted in this way, it’s likely a scam.
Commonly, these types of scammers will pretend to be a stock broker or portfolio manager offering financial or investment advice. They might claim the investment opportunity they're offering is low-risk, but offers fast and high returns. Sometimes they'll say the investment is connected to an overseas company or companies.
These scams are often sophisticated and the caller will direct you to a fake but convincing website or other material to back up their claims. They'll be persistent and may keep calling you back.
Digital currencies, including Bitcoin and others such as Ethereum, have been around since 2008 and although these are popular investment options, the currencies aren't regulated in New Zealand.
Cryptocurrencies and anyone trading in digital currencies are often the target of attacks and online scams. In recent years there have been attacks on cryptocurrency exchanges, the places where currencies are stored, leading to investors losing significant sums.
More recently cryptocurrency scams are circulating on social media sites and messaging apps like WhatsApp, offering unrealistic investment returns. Some of these scams claim to be endorsed by celebrities or well known New Zealanders, or are run as pyramid type schemes where investors are encouraged to bring others on board the scheme. People will often be scammed into believing they're investing in their own cryptocurrency wallets, however when they try to withdraw their investments they're unable to or are asked for more money to 'release' their investment.
Own your online has more information about cryptocurrency security.
False interest rates can be promoted through all online and offline channels. If you come across an investment opportunity that promises guaranteed returns or interest rates that seem too good to be true, you should feel suspicious.
Fraudulent comparison websites are set up purely to collect the contact details of people who are interested in making an investment or rolling off an existing term deposit soon. You're most likely to encounter this type of scam when searching for the best term deposit or other investment rates via search engines. Known fraudulent sites include:
- ratesfinder.co.nz
- nzcomparerates.com
- comparetermdepositsnz.com
- bondratecompare.co.nz
After inputting details into a fraudulent website, the scammer will follow up with a phone call or email claiming to be from Kiwibank or another local or overseas bank. They may send fake branded documents containing information on term deposits or other investments.
Netsafe's website checker which can be used to help determine the legitimacy of a website.
Tips to spot & deal with investment scams
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1Tahi
Be suspicious of
- Any offer that promises high returns with little risk. If it sounds too good to be true, it probably is.
- Comparison websites. Ensure any comparison sites you're using are legitimate before providing personal details. Use Netsafe's website checker to help determine the legitimacy of web addresses (URLs).
- Cold calls. It’s illegal to sell financial products through a cold call in New Zealand. If you’re contacted in this way, it’s probably a scam.
- Any unsolicited offers, including those found in digital ads, social media posts and chat groups offering cryptocurrency investments.
- Anyone encouraging you to invest. Remember that fake investment companies can be extremely sophisticated and look convincing. Scammers can be charming, knowledgeable and persistent.
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2Rua
Do your checks
- If you're unsure whether you're talking to a scammer or a legitimate organisation, hang up and call the organisation using the official phone number. Don't use the contact number or website addresses they've provided to you as it could be fake.
- Thoroughly research the opportunity, company and person you're dealing with. This could include things like searching for reviews and news articles, comparing interest rates with other organisations to ensure the offer seems realistic, and doing a reverse image search on people's profile photos to check if they're a real person.
- Research the platforms you're using to purchase or trade digital currencies and use New Zealand based platforms where possible.
- Always ensure the person or company offering the investment is registered with the appropriate regulatory bodies.
- Check Financial Markets Authority list of businesses or individuals you should be wary of if you're planning to invest.
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3Toru
Act with confidence
- Immediately discontinue communication if you're discussing an investment opportunity and something feels suspicious or 'off'. Scammers are likely to be persistent, so trust your gut and block further communication.
- Seek independent advice from a banking specialist or financial advisor before making any investment decisions.
- If you've done your research and are still proceeding with the investment, use Confirmation of Payee to check that the account owner name matches the account number of the business you're paying. If it comes back as 'Not a match', we strongly encourage you to consider whether you know and trust the payee. If you continue with the payment, you could send money to the wrong place and it might not be recoverable.
- Report any suspicious investment offers to the Financial Markets Authority.
Scammers change their tactics regularly
Visit latest scams to stay across current risks and tips to protect yourself.
Helpful resources
Think you've been scammed?
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