Because many scams are operated by criminals overseas, once you’ve given them any money it is very hard and very rare to get it back – even from countries with tough anti-fraud laws. Where you send it probably isn’t where it ends up. That’s why it’s vital you protect yourself by not getting involved in the first place.
Ignore uninvited investment offers
In New Zealand, it is illegal to sell financial products (such as shares) through an unsolicited meeting, for example a “cold call” or uninvited email.
If you do receive a call, letter or email from a stranger about an investment opportunity, hang up, throw it away or block them.
If they keep trying, contact the FMA, or ask your phone or email service provider to block them.
If they become abusive or threatening, call the police on 105 for non-emergencies, or 111 if you are in immediate danger.
Do not invest through offshore, online businesses
Financial service businesses with no offices in New Zealand are harder to regulate and police as they’re based overseas so not as easy for the FMA to contact or investigate.
It is often impossible to recover your money if an overseas investment turns out to be a scam. We cannot help you if things go wrong.
If a business is overseas with no office in NZ, or even if they sound like they are overseas, it’s even more important you do your research before you invest: Where are they? Is it a country with tough financial regulations like ours? How can you be sure they are who they say they are? Or even that they are where they say they are?
Some scammers use an imposter website, designed to look exactly like a legitimate investment. They may use the same name, logo and address as a genuine business, even though they have no connection. They may even hijack a genuine website and redirect emails to themselves.
If they provide financial services to ‘retail clients’ (eg most ‘mum and dad’ investors), they are also required to be a member of a third party approved dispute resolution scheme.
When dealing with a financial service provider, you should be able to find or be told the details of which dispute resolution scheme you can contact if something goes wrong
For some investments (such as derivatives), providers might also need to be licensed by the FMA. Those seeking a licence must first be assessed by the FMA, and will be subject to continued monitoring to ensure they meet the standards set by the regulations.
Just because a provider is registered or licenced, it doesn’t mean they can do no wrong. Always conduct your own research and due diligence, and look out for the signs of a scam.