14 Nov 2022

More investors being targeted for fraud scams, consumers warned

10:54 am on 14 November 2022
No caption

People are being enticed into investing with what appears to be a reputable company only to lose their money, a dispute resolution service says. Photo: 123RF

New Zealanders are being warned fraud cases are on the rise as Fraud Awareness Week begins.

Financial Services Complaints which is a financial dispute resolution service said consumers needed to be vigilant about fraud, following a noticeable increase in complaints around financial scams over the past year.

"From fraudulent transactions on travel cards, to merchants losing money when a consumer asked for a chargeback after receiving goods, we have seen a wide range of sophisticated incidents of fraud this year," chief executive Susan Taylor said.

One of the most notable areas they were seeing an increase in was in fraudulent investments, including "bitcoin' scams" she said.

Here people were enticed into investing with what appeared to be a reputable company only to lose their money "and sometimes quite substantial amounts of money", Taylor said.

In one case an investor lost $50,000 after scammers replicated the website of a reputable investment company, while another was scammed $13,000 while using a credit card to purchase bitcoin.

"How these frauds often work is that you invest a little bit of money and you do see a positive return in your account," Susan Taylor said.

"And then you're enticed into sending more money - so they really set you up.

"And then when you send the second lot of money, that's usually then when all the money disappears."

To protect themselves against scammers, she said people should make sure they do their homework.

"Don't be rushed into making an investment, particularly with money that you can't afford to lose," Taylor said.

"If it sounds too good to be true, it probably is."

Taylor said it was a common misconception that credit card companies would refund people if they were scammed.

"The circumstances in which consumers can recover funds spent on a credit card are limited. Consumers shouldn't rely on being able to get a refund in place of carefully considering the trustworthiness of who they deal with online."

Usually, by the time the fraud was discovered it was too late to claw the money back, Taylor said.

"If you've authorised the payment, the money has gone and the fraudster has withdrawn the money at their end."

Get the RNZ app

for ad-free news and current affairs