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Financial fraud has been on the rise since the pandemic began

The Financial Market Authority (FMA) has warned New Zealanders of three types of scams that have become more common since the beginning of the COVID-19 pandemic.

For the first half of 2020, the FMA recorded 158 complaints about investment fraud and fraud – an increase of 79% compared to the previous year. From January to June, the regulator issued 36 public warnings of suspected fraud and other non-compliant entities – 29% more than in the same period last year.

The three types of fraud with which the FMA is particularly concerned are:

  • Social media contact fraud, in which scammers use social media platforms to identify and / or connect with potential victims. Actions include making friends and messaging the target people, asking questions or making suggestions in post comments, and running fake polls
  • Hybrid romantic investment scams targeting potential victims in popular dating apps. Scammers gain the victims’ trust with sophisticated backstories and accomplices before convincing them to send money abroad to buy supposed investments
  • Scam websites that use legitimate company names, logos, addresses, certifications, and other details to deceive investors. The most recent examples are the imitations of the Kiwis company Zespri and the derivatives issuer Rockfort Markets

According to Liam Mason, General Counsel of the FMA, signs of fraud include little or no written information, soliciting payments through unusual platforms, constant solicitation and pressure.

“Scammers are always looking to evolve their approach, and this insidious trio of scammers can be subtle. the red flags aren’t always obvious, ”said Mason. “Fraudsters want to be believed and are ready to play the long game in order to gain your trust over several months. We strongly encourage New Zealanders to only do business with locally registered companies, and when you see an investment opportunity, take a step back and ask yourself if this is real. Don’t let yourself be rushed, be skeptical and ask lots of questions. “

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