FMA warns consumers about cold-calling investment offers and ‘big win’ scams
The Financial Markets Authority (FMA) is warning New Zealand consumers and investors to be wary of cold-calls asking them to buy shares or put their money into offshore firms.
The FMA is receiving an increasing number of complaints about suspicious offers that involve transferring funds overseas. The flow of complaints relates to firms or people making cold-calls and offering suspicious ‘big win’ products or services, including investment schemes and forex trading services.
The FMA’s Director of Compliance, Elaine Campbell, said today’s warning is targeted at cold-calling ‘big win’ scams, most often from overseas or unknown locations. “There are some tell-tale signs to beware of that should cause consumers to take extra caution.” These include:
- Requests to transfer funds overseas quickly to the account of a firm or person.
- Claims you must ‘act now or miss out’, putting your money in now to enjoy a big payoff.
- Discouraging or prohibiting customers from seeking independent professional advice about the product, service, or transaction.
- Offers involving software or so-called “trading systems” – often for forex trading – where consumers must buy a license or software, in order to participate.
Ms Campbell said, “There’s one principle to keep in mind: if an offer sounds too good to be true, then it probably is. Our advice is simple. Don’t transfer funds offshore to firms, or people, making offers like this – hang up the phone. If you don’t understand an investment or product, don’t put your money in.”
The FMA publishes names of firms and people where it has identified an entity or a person who is operating without registration or authorisation in New Zealand, or where the firm or person is not complying with New Zealand’s financial services law.
There is also a similar international list on FMA’s website provided by the International Organisation of Securities Commissions (IOSCO). However, even where names or firms of cold-callers do not appear on these lists, consumers should not assume they are operating legitimately.
Source: FMA- FMA warns consumers about cold-calling investment offers and ‘big win’ scams
