New Zealand’s battle against rising investment scams: A national alarm
As Fraud Awareness Week 2023 unfolds, the New Zealand Financial Markets Authority (FMA) intensifies its campaign to educate the public about the escalating threat of investment scams. This initiative gains urgency against the backdrop of nearly $200 million lost by New Zealanders to scams in the past year, a statistic that underscores the growing sophistication […]
As Fraud Awareness Week 2023 unfolds, the New Zealand Financial Markets Authority (FMA) intensifies its campaign to educate the public about the escalating threat of investment scams. This initiative gains urgency against the backdrop of nearly $200 million lost by New Zealanders to scams in the past year, a statistic that underscores the growing sophistication and reach of these fraudulent schemes.
The FMA’s recent data paints a worrying picture: over 1300 complaints and 373 warnings about investment scams since 2020. What’s particularly alarming is the evolution of these scams, which now include fake investment prospectuses and deceptive term deposit comparison sites.
These scams are not just targeting the inexperienced; even seasoned investors are falling prey. Moreover, the FMA expresses deep concern over the increasing targeting of New Zealand’s vulnerable communities and the rampant advertising of false investments on social media platforms.
The FMA’s multi-pronged strategy
Peter Taylor, FMA Director of Specialist Supervision and Response and Senior Responsible Officer for Scam Prevention and Co-ordination, emphasizes the gravity of these financial crimes.
“Scams and fraud are financial crimes that cause terrible harm to individuals. Preventing these crimes is vital to support confidence in our markets and financial services. This week is an important moment to raise awareness around the impacts of fraud and the ways to protect yourself. The FMA raised this issue to the top of our agenda this year and recently the heads of the Council of Financial Regulators agreed that FMA should take a lead role in developing a system wide response to this scourge. We are looking at ways to achieve greater coordination and cooperation around tackling these issues. We are also talking with industry groups on the same theme to encourage more coordination in the private sector with Government agencies.”
In response to this escalating threat, the FMA has taken an innovative approach by partnering with comedian Tom Sainsbury to help illustrate the nature of investment scams. This move indicates a shift towards using relatable and engaging methods to educate the public. Additionally, the FMA provides a plethora of resources on its website to aid New Zealanders in recognizing and avoiding scams, including a list of public warnings and regular email updates.
The FMA’s role extends beyond public awareness; it actively collaborates with various agencies as part of the Interagency Fraud Working Group. This group, comprising entities like MBIE, CERT NZ, Netsafe NZ, the Serious Fraud Office, and others, focuses on informing consumers and businesses about scams in New Zealand. Furthermore, the FMA co-chairs the Council of Financial Regulators alongside the RBNZ, Commerce Commission, Treasury, and MBIE, emphasizing its commitment to achieving greater coordination in the fight against financial scams.
The regulator’s proactive stance and collaborative efforts signal a comprehensive approach to combatting the rising tide of investment scams in New Zealand. By blending awareness campaigns with strategic partnerships and interagency cooperation, the FMA is not only addressing the current landscape of financial fraud but also fortifying the nation’s defenses against future threats. As New Zealanders navigate an increasingly complex financial environment, the FMA’s initiatives offer a beacon of guidance and security.