Kiwis lose $1.4m in investment scams

Kiwis lose $1.4m in investment scams

 

Kiwis are losing their life savings and retirement money to investment scams.

New data from Netsafe shows that 16 Kiwis reported losses to Netsafe of NZ$1.4 million total between April and June this year. That’s well up on the previous three months, when Kiwis lost NZ$913,000. And that figure is rising.

It’s predicted there are plenty of other victims of investment scams we don’t hear about. They aren’t reporting their losses, because the victims feel embarrassed to report it.

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Some have to remortgage

Netsafe’s chief executive Martin Cocker says: “We deal with people who have re-mortgaged their house and lost all of that,” Cocker says.

“They’ve literally given away everything – some of the losses that people are suffering are extraordinary. It’s their life savings. And it’s at a point in their life where they don’t have the opportunity to rebuild that asset.”

Cocker says reported scam losses have risen steeply this year.

“Investment scams have become the big earners in the scam space. When people invest, they tend to invest big, and if you can trick them into a false investment, then you win big,” Cocker says.

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One man lost $1.1m

Bronwyn Groot, fraud education manager at the Commission for Financial Capability, says one victim she worked with lost NZ$250,000 to an investment scam. By the time he went to police, his loss had increased to $1.1 million.

“The investment scams target a profile – normally a male over the age of 55, probably been a chief executive or an owner of his own business, a bit of a risk-taker.”

Groot explains that scammers cold call people, from lists she believes they buy from old share databases. They explain there’s a new Initial Coin Offering coming out, and then they refer to real-life offerings.

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Websites look authentic

Their websites are realistic and savvy, Groot says. Usually people start investing a small amount, but can see how good the ‘returns’ are, so they’re encouraged to invest more.

“They’re losing their retirement savings, like the guy who lost NZ$1.1 million. A lot of these people have some ability to recoup because they’re pretty savvy businessmen, and might still be working, but not all of them.”

Another popular scam is the fake invoice scam.

Netsafe says in the first half of the year, 110 invoice scams were reported, with losses totalling $NZ856,000. This amount lost is up 438 per cent on the previous year when it was NZ$159,000.

For ways to keep yourself safe online, visit Netsafe.

First published 3 September, 2018

Story by Claire Connell

JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.

 


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