Avoiding scams
Protect yourself with tips on how to reduce your risk and avoid being caught in a scam.
Keep yourself safe from scams
Being more aware of scams is worthwhile. Many New Zealanders are caught in scams each year, resulting in significant financial losses.
There is no real way to tell for certain if an opportunity is legitimate. The things we consider as signs a company or person is trustworthy are the same things scammers imitate.
Learning how to recognise scammers’ tactics is the best way to avoid being scammed.
4 ways to avoid investment scams
Real investments don’t just come out of the blue
- It's illegal in New Zealand to sell a financial product through a cold call or an e-mail you haven't agreed to receive.
- Sign up for two factor authentication so you know if someone tries to access your account.
- If someone approaches you with an offer – ignore it.
Spotlight on: Initial Public Offerings (IPOs)(external link) — Financial Markets Authority
Check the source to make sure it’s real
- Type the name of the company and 'scam warning' into your search engine.
- Take a look at the Financial Markets Authority's scam warning page.
- If your money is going offshore – be really careful – it's almost impossible to get it back.
- Check whether the company is registered in New Zealand to provide financial services:
New Zealand Companies Register(external link) — New Zealand Companies Office
Get a second opinion before handing over money
Run it by friends and family, seek advice from a financial advisor or talk to someone you trust who can help you spot any red flags.
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.
8 things you can do to avoid being scammed
It is best to be suspicious of any contact you weren’t expecting. Taking time to consider an offer could be the difference between being caught in a scam and avoiding it.
How to protect your money from scams
Check your card security settings. Banks offer different types of security features which keep customers' accounts and cards secure. Set daily maximum withdrawal limits, alerts when a card is charged and ability to lock/cancel a card in seconds.
Update your contact details at the bank. Banks have teams and systems in place looking for suspicious transactions and activity across customers’ accounts. Keep your contact details up to date so bank can get in touch if they suspect suspicious activity. Remember, banks will never ask a customer to provide login details.
Stop and take some time to think. Check out whether request for payment is genuine. Remember: a genuine company or government department will never pressure you to make a payment. Google the person or company you’re about to pay and look for any reviews or experiences that others may have had. Talk to someone you trust and get their opinion. If the payment is part of a scam, there’s very little chance you’ll get the money back.
Reduce daily account withdrawal limits. Daily transaction limits are put in place to help protect you from fraud in case someone steals your password or pin and trues to empty your account. Limits vary from one card or account type to another and from bank to bank so ask your bank how to get account limits working for you.
Set up 2FA with your bank. Two-step verification helps protect your account from unauthorised activity. When you log in to your accounts online, you mostly use a simple 'username and password' combination to do so. Adding two-factor authentication (2FA) to your login process is a simple way of adding an extra layer of security to your accounts. Once 2FA is in place it may ask you to confirm your identity when logging in or making payments. Every bank is different so ask your bank how to get 2FA working for you.
Recognise when you're most at risk to scammers
It's true that unexpected contact is the most common delivery method for scams, but you can also be targeted by a scammer who knows something about you. Someone running a scam may have found out more about you online than you are aware, picking up on what’s happening in your life, which bank you use, what you’re looking for online.
We are most vulnerable to scams that make sense in the context of our lives.
Spending more time online has meant that we are more exposed to scams, whether that be at work, at home or at play. Many of us look online to make money and find work. Scammers know this and take advantage.
It can feel like a negative approach but it’s important to be suspicious to keep yourself safe when a scam is more difficult to spot.
If you think it's a scam, it's probably a scam