By Cam Harper
Chances are you might know someone who has fallen victim to an online financial scam. There’s no doubt it’s a growing problem and scammers are getting increasingly more sophisticated in their tactics. It means even those of us who think we’re savvy enough could be outsmarted.
It’s daunting. And when you’re weighing up investment options to build your wealth it can be enough to make you want to take no action at all. So, what can you do?
The good news is, credible financial providers are invested in keeping your money secure as well as growing your investment. They are constantly improving their processes to help deal with increasingly complex scams.
Online scam warning signs:
- Urgent requests with little specific details
- Any request that asks you to ‘release funds’, open a link or download a file
- Unusual requests from someone you recognise, scammers are beginning to impersonate bosses, colleagues and friends to try and improve legitimacy
- Altered account numbers on regular payments. Always double check the account details on recurring payments
One of the biggest recent initiatives has been a bank-wide introduction of ‘confirmation of payee’. This service provides a simple check that the receiving account name and number matches bank records in real-time.
‘Confirmation of payee’ is a step in the right direction, but it doesn’t protect customers when making offshore transactions.
Anonymous middlemen, high-risk lending providers, and vague offshore structures have made it harder for investors to follow their funds. Often, capital is routed through cloudy systems, and investors are left in the dark about how their money is being used.
Offshore investment providers can sometimes offer tax advantages or exposure to diversified markets, but they come with serious trade-offs, like the lack of transparency.
Warren Buffet famously said, “only invest in what you understand.” That means, if you understand houses, invest in them. If you understand what a company does and how it makes money, buy shares in it. You’ve done your research on crypto? Go for it.
Knowledge is power and investing in what you already understand gives you another layer of protection against scams.
How to protect your funds when moving money online
Look for extra security steps: Reputable online investment platforms or portals will have rigorous security measures to keep your money safe. Encryption, regular software updates and two factor authentication are steps to look out for. Southern Cross Partners (SCP) uses two factor authentication for its online portal login to protect its investors and their funds. Extra security steps can feel tiresome, but it’s a small price to pay to ensure your transactions are secure.
Check for webpage impersonations: Online scammers might set up impersonation webpages of reputable investment companies, giving these fake links to investors to follow. A quick google search to find the real website to invest through is all you need to do to save your money.
Consider your sources: Where did you hear about that potential investment opportunity? If it’s a stranger on the internet, alarm bells should be ringing.
Make sure you are checking your investment advice comes from a legitimate source. Only trust registered advisers or people you know in person, and not your friend online that you’ve never met.
Do your research: Make sure you do your due diligence into where your money is going. Research online and pick up the phone to make sure you know where your money is going. If you’re concerned about how your funds are being used, a quick conversation could give you the peace of mind you’re looking for.
Ensure large investments: For large transfers or international investments, such as investing large sums into the property market, consider requesting insurance through your bank or a third party.
Invest locally: Investing in your local economy is potentially simpler. If you needed to raise a dispute with the provider, both parties will be covered by the same law.
Why Southern Cross Partners?
Online scams are on the up, and it’s getting harder to spot them. Making sure your investment provider is committed to keeping your money secure is paramount.
Southern Cross Partner’s online portal is available 24/7 for you to keep track of your investments. We’ve been partnering with Kiwi investors for more than 28 years, and we love to support our customers in getting where they want to be financially.
As New Zealand’s largest property-backed peer-to-peer lender, we take a personalised approach to lending and investing, putting the customer in the driver’s seat with our self-service portal.
All our investments are secured by first mortgages over New Zealand property. Investment rates start from 6.75%* p.a., with a current minimum investment of $10,000*.
For more details visit www.southercrosspartners.co.nz
*Subject to change and availability
Southern Cross Partners is licensed to provide peer to peer lender lending services under the Financial Markets Conduct Act 2013. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser before making any investment decisions.