The Financial Markets Authority (FMA), New Zealand’s financial market regulator, revealed on Wednesday that one in every five New Zealanders was a target of financial scams during the COVID-19 pandemic. Scammers are mostly impersonating legitimate New Zealand businesses to trap potential victims.
The regulator issued 61 fraudulent investment warnings between April 1 and November 5 this year, much higher than the previous year. Out of that total, 21 are imposter scams (34 percent) for which scammers faked websites and social media identities of the businesses.
Earlier, the Kiwi regulator warned against the scammers impersonating the watchdog as a part of money transfer scams.
“We’re constantly vigilant about the scams that are targeting New Zealanders, but it’s like cutting the head off a hydra – two more will pop up in its place. You can never stop or warn about them all, and they often operate outside our reach, especially overseas,” FMA Director of Regulation, Liam Mason said.
The regulator also requested citizens to become more vigilant and asked them not to fall for schemes offering high returns.
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“The best solution is for New Zealanders to be inherently sceptical of any investment opportunity that seems too good to be true and to do a bit of background research if there are any red flags,” Mason continued.
Cryptos Are Favourite
Though the scammers are targeting potential victims with a range of schemes, scams involving cryptocurrencies are most commonly followed by investment software and shares.
Meanwhile, other global regulators also saw an increasing number of scams during the pandemic. Many local regulators in the UK also reported that the fraudsters were using the fear of Coronavirus to exploit citizens.
“In the past, scammers have attempted to exploit New Zealand’s image as a well-regulated market, but these impostor scammers seem to be more sophisticated and could be due to growth of online commerce due to COVID-19,” Mason added.