Safeguarding your investments: A guide to recognising scams

Investing hard-earned money is a step many New Zealanders take to secure their financial future. If you’re considering investing, it’s important to be aware of investment scams. Scams are deceptive approaches designed to trick you into giving away your money, login credentials, payment card details, or personal information.

To help you safeguard your investments, in this article we explore some common investment scams and how to spot their red flags.

Fake investment opportunities  

Suppose you’re searching the internet for the best opportunities to invest your money and get great returns; you may come across an ad or website comparing investment rates, or even investments allegedly endorsed by celebrities. When you visit the website, you’re encouraged to sign up and enter your details (name, phone number, and email address) so that the ‘investment companies’ can contact you with various ‘offers’, including managed funds, investment packages, businesses, or properties.  However, the problem is that these websites may be set up by scammers with the sole intention of presenting fake investment opportunities and getting your personal details.

Now that the scammers have some contact information and you’re expecting to hear about possible investments, they can easily reach out to paint a picture of a supposedly irresistible opportunity and persuade you to ‘invest.’  So, how can you know if you’re dealing with a scammer?

High-pressure tactics

Scammers often use high-pressure tactics like saying “today is the last day for this exclusive ‘once-in-a-lifetime’ investment opportunity” to get people to commit. The urgency they inject into their offers can be a telltale sign of trouble.

It’s important to pause and think before you act. Authentic investment opportunities provide you with the time to carry out your own due diligence. So, pause and consult experts like qualified financial professionals, seasoned advisers, and experienced investors. Let informed choices, not urgency, guide your investment journey.

Guaranteed returns  

Be cautious of offers that promote returns that’ll defy market realities. The performance of legitimate investments typically have ups and downs. It requires time and patience to generate returns – which can never be guaranteed to happen. If an investment opportunity promises a world of high gains, low risk, and it sounds too good to be true, it probably is.

Credentials are key  

Before embarking on any investment journey, take the time to check the credentials of the provider presenting you with any investment opportunities.

Genuine investment operators are registered and licensed. The Financial Markets Authority (FMA) website can help you confirm the legitimacy of investment providers. You can search for the names of investment providers on their website. Type the operator’s name into the search bar or filter by subject (e.g., ‘managed investment schemes’ or ‘market operator’).

If you can’t find the provider on the FMA website, they’re likely not a genuine operator, and you should steer clear.

Tips to be Scam Savvy

As scammers continue refining their techniques and become increasingly sophisticated, it’s more important than ever to remain alert and cautious. While the red flags covered here serve as invaluable guideposts, staying informed about new scams is important.

The ‘latest scams’ page on our BNZ website highlights current scams to be aware of, and the FMA have a warnings and alerts page with names of businesses or individuals you should be wary of if you plan to invest.

Visit our Get Scam Savvy website for resources to identify common scams, what to do when you spot them, and what to do if you’ve been scammed.

Here are the  top tips to be Scam Savvy when looking for investment opportunities:

• Legitimate investment comparison websites usually link you to the companies offering investments. They won’t capture and pass on your details to someone claiming to be an ‘advisor’ or ‘broker’
• Contact investment firms through their official New Zealand-based websites
• Never contact investment firms through online contacts, emails, links, or phone numbers sent to you directly or found on other websites
• Ensure the investment firm is licensed by the FMA before moving any funds
• Check the FMA’s warnings and alerts page on their website
• If it looks too good to be true, or if it feels wrong, it probably is.

If you’re a BNZ customer and think you’ve been scammed, contact us as soon as possible.

Tip:  Whether you’re a BNZ customer or not, BNZ will never send emails or texts containing links to online banking and ask you to log in.

Remember, every step toward safeguarding your wealth is a step toward a more secure financial future. Stay informed, stay cautious, and move forward with confidence on your investment journey.

This article is solely for information purposes. It’s not financial or other professional advice. For help, please contact BNZ or your professional adviser.   No representation or warranty is made as to the accuracy, reliability or completeness of any statement made in this article.  No party, including BNZ, is liable for direct or indirect loss or damage resulting from the content of this article. Any opinions in this article are not necessarily shared by BNZ or anyone else.