A Kiwi man has lost $160,000 to an online trade portal scam, highlighting the awareness needed when it comes to fraud.
Jack (whose name has been changed for anonymity reasons) had just come into some money when he received an email from an investment firm which said it offered customers a self-directed investment account that enabled them to trade stocks.
After doing some research and reading reviews, Jack approached the firm to make further enquiries.
Jack signed up and was given access to a purported online trading portal where he could trade dummy shares.
He was amazed with the success he was having and decided to authorise the payment of $160,000 to his trade account.
Three months later Jack realised he had been a victim of an investment scam and the trading account was a 'demo' trading account through which no real-world trades could be made.
Jack notified the money transfer service and requested a recall of his funds. But unfortunately, all the funds had already been withdrawn from the account.
Jack complained that the money transfer service had not done enough to identify the scammers and was unhappy with their efforts to recall the money.
Financial Ombudsman, Susan Taylor, said although they sympathise with Jack, it was a very sophisticated fraud.
"Once the money has been transferred to the overseas scammer's account and the scammer has withdrawn the money, it is usually impossible to recover that money."
Taylor says often when a scammer reaches out to a customer first, it's an "automatic red flag."
"If you did not request contact from the specific firm, tread very carefully. Investing money overseas with a company you have never dealt with personally before carries large risks.'
Fraud Awareness Week
As Fraud Awareness Week kicks off today, the financial ombudsman service, Financial Services Complaints Ltd (FSCL), is reminding New Zealanders to be vigilant when it comes to fraud, following a steady number of complaints about financial scams over the past year.
From online investment scams, identity theft by a partner in a relationship, to scammers using remote access software to get someone's bank account information, we have seen a wide variety of incidents of fraud this year," explains Taylor.
"Perhaps the most common complaint we are seeing is identity theft. Scams can happen to anyone in sometimes the most unexpected ways, and the fraudsters are often very persuasive.
"With online transactions part of everyday life for most New Zealanders, scams are becoming more technologically sophisticated with fraudsters constantly designing new ways of scamming their victims," said Ms Taylor.
"If something seems too good to be true, it probably is."
$198 million dollars lost to scams in the last year
New data released from the Ministry of Business, Innovation & Employment reveals $198 million was lost to scams over the last year.
MBIE's spokesperson for Fraud Awareness Week, Ian Caplin, says scammers are targeting everyone across New Zealand, but especially those with savings or investments who are looking to earn a little bit more from their money.
"It's important to remember real investments don't just come out of the blue. If it seems too good to be true, then it probably is. If you receive unsolicited investment offers via email or through a 'cold call', ignore it. It's illegal to sell financial products through these methods in New Zealand."
"If you don't understand it, walk away. Before you make any investment, understand how the investment works."
