More investors are being targeted for fraudulent scams, consumers warn

People are tricked into investing in what appears to be a reputable company to lose their money, according to a dispute resolution service.
Photo: 123RF

New Zealanders are being warned that fraud cases are on the rise as Fraud Awareness Week begins.

Financial Services Complaints, a financial dispute resolution service, said consumers should be vigilant about fraud, following a notable increase in complaints about financial scams over the past year.

“From fraudulent transactions on travel cards to merchants who lose money when a consumer requests a chargeback after receiving goods, we have witnessed a wide range of sophisticated fraud incidents this year,” said said general manager Susan Taylor.

One of the most notable areas they were seeing an increase in was investment fraud, including “bitcoin scams,” she said.

Here, people were tricked into investing in what seemed like a reputable company, but they lost their money “and sometimes quite large sums of money,” Taylor said.

To protect themselves from scammers, she said people should make sure to do their homework.

“Don’t rush into making an investment, especially with money you can’t afford to lose,” Taylor said.

“If it sounds too good to be true, it probably is.”

Taylor said it’s a common misconception that credit card companies will refund people if they’re scammed.

“The circumstances in which consumers can recover funds spent on a credit card are limited. Consumers should not rely on the possibility of obtaining a refund instead of carefully considering the reliability of the people they deal with online .”

Usually, by the time the fraud was discovered, it was too late to collect the money, Taylor said.

“If you authorized the payment, the money disappeared and the fraudster withdrew the money from his side.”