Investment Scams

This Topic Includes:
Where to find more information
Report it!

What are investment scams?

These are schemes cleverly designed to trick people out of their money by promising high returns on an investment.

Investment scams are promoted on the internet. Fake and dodgy share schemes are marketed by telephone salespeople with high pressure and sophisticated selling techniques. Sometimes investment scams are promoted within groups of people with common interests.

Investments scams come in various forms but they have common characteristics.

What to look out for

The higher the promised rate of return, the greater the risk, and the more you should investigate.

Beware of schemes which

• promise very high returns with little risk - these promises are too good to be true
• give little information in writing - all legitimate investments must have documents that explain the investment
• claim to be "safe" or "risk-free" - all investments have some degree of risk have no Investment Statement or Registered Prospectus
• give few or no details about the person or company making the offer
• have no Investment Statement, Registered Prospectus, or financial statements.

Beware of offers which claim that

• you must take up the offer immediately or you'll miss the opportunity - legitimate companies don't pressure people to act without time to look into the deal
• returns come from the "top 100 world banks", "prime banks", "top 25 European banks" or similar statements - these agencies do not exist
• this is a "private" offer, and only open to a select few
• the scheme must be kept confidential in order to succeed.

Where to find more information

Securities Commission - Check the New Zealand Securities Commission website for warnings about dubious investments and a list of overseas brokers who have approached New Zealanders with bogus share offers.

Companies Office - Check with the Companies Office to see if the company is registered in New Zealand.

Serious Fraud Office  - check with the SFO for any warnings about current fraud.

New Zealand Exchange - visit the Exchange's website to find a New Zealand broker if you are wanting to buy shares in New Zealand or overseas companies.

International Federation of Stock Exchanges - visit to check any international broker company. 

Retirement Commission - for personal investment information visit the Retirement Commission online.

Report it!

Scamwatch does not receive reports of this type of scam.  The New Zealand Securities Commission provides warnings on its website for investment schemes and overseas brokers who have not been disclosing the type of information about themselves and their business that is required under New Zealand law. Please direct any enquiries about investment schemes or overseas brokers to the Securities Commission.