FMA Urges Investors to Know Scam Warning Signs
‘Bob’ from Christchurch lost $67,000 after being cold-called by scammers who persuaded him to ‘invest’ in a
pharmaceutical firm.
His case is being highlighted by the Financial Markets Authority (FMA) as part of the Ministry of Business, Innovation and
Enterprise’s Fraud Awareness Week.
When Bob received a call from an overseas company, he initially said no. However, he did some research on the company
and it looked legitimate. At the time it did not appear on the FMA’s warnings lists and wasn’t connected to any scams.
Over a period of time, Bob paid the scammers a total of $67,000. He became suspicious when the company told him the
shares had been sold, and he would receive the funds the following week. He never received the money and was later told
he’d need to pay another $21,000 to get the funds released. Bob hasn’t paid this.
He continues to receive up to six unsolicited calls a day.
Paul Gregory, FMA Director of External Communications and Investor Capability said, “The best thing investors can do to
someone cold-calling offering an investment from offshore is to put down the phone. Ignore that e-mail. If you hand over
money and it turns out to be a scam, it’s often impossible to get your money back.”
Before you invest:
• Check if the provider is licensed by the FMA. A licensed provider offers you greater protections. Registration on the
Financial Services Providers Register does not mean a provider is licensed.
• Make sure the company isn’t on our warnings list.
• Be extra cautious if the provider is based overseas. If it is a scam it’s often impossible to recover your money.
• Read the FMA’s steps to protect yourself.
In October the FMA recorded the highest number of monthly calls about fraud, scams and cold calls for more than two
years. This may partly reflect the FMA highlighting issues around binary options fraud as part of World Investor Week.
ENDS