Scams come in many forms and are prevalent now more than ever.
The FMA (Financial Markets Authority) has some basic points on how to spot a scam when investing.
Do a reality check:
Check it out with someone else. Be wary if you are told the offer is limited or the opportunity is secret, it could be a scam. If you’re thinking about investing online, consider talking in person with a friend, a workmate, a family member or someone you trust before you send money. With their help, you can feel more confident in the decision you’re making.
Real investments don’t just come out of the blue. Be cautious about who is contacting you and that they are a licensed financial advice provider. Only licensed financial advice providers in New Zealand are allowed to cold call or send an e-mail you haven't agreed to receive and to sell a financial product. You can check this by searching the Financial Services Providers Register.
Do some digging:
Type the name of the company and 'scam' or 'legit' into your search engine.
Check whether the company is registered in New Zealand to provide financial services by searching the Financial Services Providers Register. Use a “who is” web tool to find out who registered it, and when. If it wasn’t in a country where the business says it is based, and/or was recently set up when they claim to have been operating for years, be very suspicious.
The International Organisation of Securities Commissions (IOSCO) receives alerts and warnings from its regulators across the world about firms which are not authorized to provide investment services in the jurisdiction which issued the alert or warning. They can be a good source to check overseas investment opportunities against.
Take a look at the Financial Markets Authority's scam warning page to see if the entity has already been flagged.
Ask to see the Product Disclosure Statement (PDS) for the investment. Almost all legitimate investments offered in NZ must have some form of disclosure document. If they are providing little or no information or documents, it could be a scam.
Note any discrepancies in their bank details. Ask yourself, are the payments unusual? If they say they’re in one country but their bank account is in a different country, it could be a scam.
Reverse search any images on their website. Sites like Tineye.com let you copy and paste images into their search engine, and they will tell you where else it’s been used.
Give yourself time:
Ask questions.
Be suspicious of deadlines.
Repeated contacts.
Understand the risk.
If you don't understand it, walk away:
Before you make any investment, make sure you understand how the investment works. If you don't understand the investment, walk away.
All investments come with risk:
All investments have an element of risk. If someone is telling you there is no risk, then it is likely to be a scam. No returns are ever guaranteed.
If your money is going offshore or being invested in Crypto/Digital Asset – be really careful – it's almost impossible to get it back.
🚨 Report a scam
If you receive an email, SMS, or a phone call or a group chat via a messaging services (WhatsApp, Signal, Messenger) that you believe is a scam attempt please send a copy or details to hello@hatchinvest.nz. Our team will investigate and use this information to help keep our investing community safe.