Investors warned to beware of a rising volume of scams including phishing scams in dual warnings from the Financial Markets Authority and Department of Internal Affairs

Investors warned to beware of a rising volume of scams including phishing scams in dual warnings from the Financial Markets Authority and Department of Internal Affairs

The Financial Markets Authority (FMA) is warning of a sharp rise in the volume of investment scams. At the same time the Department of Internal Affairs (DIA) says it has received hundreds of complaints during the past 24 hours about big phishing scams.

Here's the FMA's announcement.

Rise in scams impersonating NZ businesses during COVID-19

The Financial Markets Authority (FMA) has reported a steep rise in the number of investment scams attempting to impersonate legitimate New Zealand businesses since the emergence of COVID-19.

FMA research has also shown one in five New Zealanders have been targeted by investment scams.

From 1 April to 5 November 2020, the FMA issued 61 warnings about investment scams, of which 21 (or 34%) were impostor scams, where the names and details of legitimate businesses are unlawfully used by scammers to trick investors, such as fake websites or social media accounts. By comparison, in the same timeframe during 2019, the FMA issued 40 warnings and only four (10%) were impostor scams.

The regulator is warning New Zealanders to be on the lookout for signs of such scams, which could include overseas phone numbers or addresses being mixed up with New Zealand contact details, or the website domain name not matching the content of the website. Other red flags might be the promise of high returns and ambiguity about what is being offered.

The FMA is running an impostor scams public awareness campaign as part of Fraud Awareness Week, which runs from 15 to 21 November.

Liam Mason, FMA Director of Regulation, said warnings about scams and fraud have been a priority for the regulator throughout COVID-19, as consumers may be more susceptible to seeking high return investments in uncertain economic conditions.

“We’re constantly vigilant about the scams that are targeting New Zealanders but it’s like cutting the head off a hydra – two more will pop up in its place. You can never stop or warn about them all and they often operate outside our reach, especially overseas,” Mr Mason said.

“The best solution is for New Zealanders to be inherently sceptical of any investment opportunity that seems too good to be true and to do a bit of background research if there are any red flags.

“In the past, scammers have attempted to exploit New Zealand’s image as a well-regulated market but these impostor scammers seem to be more sophisticated and could be due to growth of online commerce due to COVID-19. There’s a lot of public information available regarding the registration of New Zealand businesses, which is important for our transparency, but scammers may try to exploit this.”

Christchurch investment firm impersonated

GRC Investments Limited, a private investment company based in Christchurch, is one of the New Zealand businesses that scammers have sought to exploit.

The FMA issued a warning in September that an investment scam appeared to be operating under a similar name – G.R.C Trustee.

G.R.C Trustee’s website falsely claimed it was owned, operated and regulated in New Zealand, and gave the same Christchurch address as the New Zealand business. It even linked to a copy of GRC Investments Ltd’s Certificate of Incorporation, to further fool investors.

In fact, GRC Investments had nothing to do with the impostor and never sought public investors. It was solely used for private investing by its owner, Garry Carleton.

Mr Carleton was first made aware of the impersonation was when the FMA contacted him.

“I was annoyed and worried when I first found out,” Mr Carleton said. “Annoyed that investors’ money could be stolen and concerned that somebody might turn up on my doorstep and threaten my family if we didn’t pay what they’d lost to the scammers.”

Fortunately, there were steps Mr Carleton could take to mitigate the risk.

“Initially I felt powerless to do anything, but then I remembered the Companies Office has added optional fields to their website that let me to add extra details about my company. I’ve used those to add a warning about the scam, should anybody look up my company.”

“Sure enough, as soon as I did this, the scammers’ website stopped linking to my company’s entry on the Companies Office website.”

“I’m now looking at updating my other companies’ details, to advise that they are private companies not dealing with the public.”

He recommends other companies do the same, and is in no doubt why such scammers are stealing Kiwi companies’ identifies.

“We have a good reputation because the vast majority of our businesses operate honestly and responsibly. The scammers are simply abusing that to steal other peoples’ money.”

Who scammers target and how

More than one in five Kiwis have been approached about a potential investment scam in the past, according to supplementary questions in the FMA’s annual Investor Confidence Survey.

Men were significantly more likely to be approached than women (27% v 18%) and one-third of those aged 70 or over have been approached.

Cryptocurrency was the most common type of investment scam, which nearly half of those targeted had been approached about. This was followed by investment software packages and seminars, and shares.

Scammers use a variety of channels to approach people, but email was found to be the most prominent method (47%), followed by social media (25%) and over the phone (24%).

What consumers/investors can do:

·Don’t use contact details from the website. Find the company’s phone number or email address from an independent source, such as a directory, and contact the business directly

·Check any claims of being licensed or registered in NZ.

·Check the domain name, which can be done via dnc.org.nz for .nz domain names and ICANN’s WHOIS service for .com domain names

What businesses can do:

·Issue direct and public communications to clients/customers warning your business is being impersonated (e.g. posting on your social media pages)

·Report the case to a relevant government agency (e.g. FMA, CERT)

·Update your business’ details on Companies Office or the FSPR to warn about the scammers

More information about investment scams can be found on the FMA website.

And here's the DIA's press release.

Hundreds of complaints about new scams

Te Tari Taiwhenua Department of Internal Affairs has received hundreds of complaints over the last 24 hours about large-scale phishing scams the public should be aware of.

The scams involve people being sent a text message with a link to a website that can be used to gain the recipient’s financial information. Engaging with these messages results in significant financial loss. If you are a victim of these scams, please contact your bank and lodge a complaint with the Police.

One of the most common scams will see the sender attempt to gain the recipient’s trust by impersonating United Parcel Service (UPS).

The webpage will prompt the recipient to confirm redelivery of the parcel and advise them a $2-$3 fee that needs to be paid. The recipient will instead be directed to a ‘special offer’ page in the same styling as amazon.com, offering the latest smartphone at a heavily discounted price and prompting the recipient to provide personal and financial information.

If the recipient provides their details, the scammer will use their credentials to log in and steal money from the target’s account, or on-sell the credentials to others. Similar text scams have been sent impersonating the Lotto.

If you receive a text you were not expecting or a text message from an unknown sender, do not click any hyperlinks included in the message. Simply report the text spam for free on your phone by forwarding the spam text message to 7726.

How to report a spam message

Email Spam: If the email has no attachments then you can complete a short online form on our website. If the email has attachments or may be malicious you can simply forward it us.

Text Spam: You can report text spam for free on your phone by forwarding the spam text message to 7726. The Department will contact you with details on how to complete a report.

Help and Guidance

Department of Internal Affairs: If you want more information about what to do if you receive spam please check out our factsheet. For more information about how to avoid being exposed to spam and online scams you can visit our webpage here.

Netsafe: If you want more information about harassment and abuse under the Harmful Digital Communications Act and all types of scams you can visit https://www.netsafe.org.nz/

Consumer Protection: For more information about how to minimize the impact of spam and scams visit Consumer Protection on www.consumerprotection.govt.nz

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15 Comments

Does this include Aussie banks, closing up Banks, locally, seem to be dissapearing into wodwork, plus reducing staff hours.

Wicked.

What about stuff like this:
"With mortgage-backed security and an impressive guaranteed 10% p.a. fixed return, the Du Val Mortgage Fund provides qualifying investors with the best of both worlds in terms of security and return."

Minimum investment is $750k. If they can guarantee 10% p.a. fixed return, why do they even need more funding? Why not just borrow at the normal rates from banks, or issue bonds?

seems like a good ponzi scheme.

Their response when questioned:
"We need $425m annually to deliver our housing targets and the mortgage fund represents 23% of this capital stack.
Please let us know of an NZ registered bank that can get even close to providing that level of funding.....
I will save you the headache.
We source $200m from major global North American institutions, $125m from an aggregate of NZ banks and other lenders and the final piece is provided by our Funds Management division.
If you are genuinely interested in how funding works for NZ’s largest apartment developer you are welcome to download the Information Memorandum. "

Plenty of builders/developers going belly up, past and present. Google Taradale developments. They built complexes throughout NZ, used underwriters to finance their leaky and poorly constructed apartments.

goes double for Auckland council

YouTube is advertising crypto-related scams quite frequently. At the same time, they've blocked credible channels with crypto related content.

I've heard of a scam coming from REINZ, something to do with housing. Watch out.

I love how most investors are aware that a high ROI / low (or zero) risk combination is a sign of a scam, but fail to apply the same logic to the property market. The Church promises doubling every 7 years and no risk of things going belly up...

The Church promises doubling every 7 years and no risk of things going belly up...

And the NZ media loves him. This conman should be selling pencils from a cup on the sidewalk.

LOL. I was about to write something along the very same lines, but you got there first.

I saw the headline and immediately thought of Bitcoin.

I think most people would. The biggest skeptics of rat poison are the masses. The same people who probably don't think much about what money is.

Kiwis must also rest assure, there's no such things of scam or riskier move in the govt and CB guarantee of the current wealth creation (we called a silent guarantee).. housing, yes it's in the silent book of guarantee, bitcoin? lotto? pokies machine? now, those doesn't carry that silent guarantee. The only way it's to be in the silent guarantee in the future is by; more and more of NZ population get into the scheme first.