FMA Warns against Fraudster Impersonating the Regulator

Scammer tries tricking consumers and investors into pretending to be a regulatory clerk.

The FMA warned of impostors four times in October 2022.

New Zealand's financial industry watchdog, Financial Markets Authority (FMA), issued a warning on Tuesday against an individual claiming to work for the regulator. The fraudster is cold-calling consumers to solicit personal information and scam potential investors.

According to a statement released by the FMA, the individual had tried to possess some personal data regarding members of the public that he or she is targeting.

"The correspondence is fictitious and characteristic of advance fee fraud. Please note that while the FMA may directly contact licensed or regulated entities from time to time, we will never ask for payment or financial information over the phone," the FMA commented in a press release.

"If you get an unsolicited call, we recommend you hang up and contact us directly via the contact information provided on our website."

The FMA reminds its representatives to not cold-call consumers, including individual investors. At the same time, it draws attention to the rules on how to act in case of suspected financial fraud or scam.

In October, New Zealand's regulatory watchdog warned against impostors four times. Three previous alerts were related to clone websites: nzglobaltrading.com, horizoncapital.ltd and goldenchaseltd.com. These websites claimed there are registered companies in New Zealand, using a name of legitimate entities: NZ Global Trading Company Limited, Horizon Capital Limited and Golden Chase Limited.

Imposter Scams Account for 34% of All Investment Frauds

Back in 2020, during the peak of the Covid-19 pandemic, New Zealands' FMA warned against the rising number of investment scams. The number of possible fraud attempts during that time was significantly higher than the previous year. What is more, imposter scams, where fraudsters faked social media, websites and personal identities, accounted for 34% of all investment fraud.

"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 almost two years ago.

The FMA's experience confirms what other financial regulators are saying: if an investment sounds too good to be true, it probably is. At the same time, statistics show the popularity of cryptocurrencies and the potential fraud involving them has increased significantly in the last two years.