How can I protect my retirement savings from investment scams?

Question: I’ve worked hard for the past 35 years and have some money saved that I want to invest and grow ahead of my retirement. How can I make sure I’m not being scammed? What are the main things I should be aware of when avoiding investment scams?

Answer: In order to avoid investment scams, the most important rule is to slow down and independently check the investment, the people offering it and the account receiving your money before making any payment.

Investment scams are becoming increasingly sophisticated. A professional website, official-looking documents and a company registration number can all create the impression that an opportunity is legitimate. Unfortunately, scammers can copy these details from genuine businesses or manufacture convincing documents. Impersonating legitimate companies is just one way that scammers trick people into parting with their money.

The New Zealand Financial Markets Authority has warned about fraudulent investment websites that falsely claim to be registered in New Zealand. Some display fake incorporation certificates, while others copy information belonging to genuine New Zealand companies and present it as their own. These scams may target New Zealanders, Australians and investors in other countries.

This means that finding a company with the same name on an official register is not enough by itself. You must also establish that the person, website and bank account you are dealing with genuinely belong to that company.

1. Be suspicious of guaranteed or unusually high returns

All genuine investments involve some degree of risk. The likely return will usually reflect the amount of risk you are accepting.

Be cautious if someone promises:

• guaranteed profits;
• unusually high returns;
• little or no risk;
• regular returns that appear unaffected by market conditions; or
• an opportunity that is supposedly available only for a short time.

When avoiding investment scams, watch out for statements such as “guaranteed”, “risk-free” or “you cannot lose”. Even where an investment itself may be genuine, no responsible provider would ever suggest that investment returns are risk free or certain.

2. Don’t be rushed

Scammers often try to prevent people from doing thorough research and checking an opportunity properly. They may claim that the price is about to increase, the offer is about to close or only a few places remain to create urgency.

You might receive repeated telephone calls, emails or messages encouraging you to act immediately. The person may also tell you not to discuss the opportunity with your bank, family or financial adviser.

A genuine investment opportunity should withstand careful examination. Tell the person that you need time to undertake independent checks. If they object, increase the pressure or become evasive, step away to help you avoid the investment scam.

Before investing a significant part of your retirement savings, consider discussing the proposal with a licensed financial adviser and someone you trust who is not connected with the investment.

3. Consider how the opportunity found you

When avoiding investment scams, take extra care if the investment was introduced through:

• an unsolicited telephone call or email;
• a social media advertisement;
• WhatsApp, Telegram or another messaging application;
• an online investment or trading group;
• a new online friendship or relationship;
• an apparent celebrity or business endorsement; or
• someone claiming to have exclusive investment information.

Scammers can create false social media profiles, fake news articles, fabricated testimonials and manipulated videos. They may spend weeks or months building trust before introducing an investment opportunity.

Do not assume an opportunity is genuine because it was promoted by someone who appears knowledgeable, successful or well known. Especially with the rise of AI, scammer impersonations have become extremely believable and hard to discern from reality. Never assume. Always double check and verify through trusted sources.

4. Make sure you understand the investment

Before paying anything, you should be able to explain:

• what you are investing in;
• how the investment is expected to make money;
• what risks are involved;
• who will hold or control your funds;
• what fees apply;
• how you can withdraw your money; and
• what will happen if the investment performs poorly or the provider fails.

To avoid investment scams, ask for the official offer documents, such as a Product Disclosure Statement or prospectus where applicable. Read the documents and obtain legal independent advice if anything is unclear.

The FMA’s scam guidance recommends walking away if you do not understand how the investment works. ASIC’s Moneysmart guidance similarly suggests testing your understanding by seeing whether you can explain how the investment generates its returns to someone else.

Complexity is not proof of fraud, but unnecessary complexity can make it easier to hide a scam.

5. Check the provider through official sources

Do not rely on certificates, licence details, links or contact information supplied by the person offering the investment. Conduct your own searches from a separate device or browser if possible.

For an investment provider claiming to operate in New Zealand, check:

• the New Zealand Companies Register;
• the Financial Service Providers Register; and
• the FMA warnings and alerts.

For a provider claiming to operate in Australia, use:

• ASIC’s Professional Registers Search;
• the Moneysmart Investor Alert List; and
• ASIC’s Check before you invest guidance.

Check the legal name, company number, licence number, registered address, website and telephone details. This will help you to avoid investment scams.

Remember that company registration is different from authorisation to provide financial services. ASIC specifically warns that registration alone does not establish that an Australian company is licensed or authorised to offer an investment.

Also remember that the absence of a company from a warning list does not prove that it is safe. Scam websites and business names can change faster than regulators can identify and publish them.

6. Confirm you are dealing with a genuine company

Scammers frequently impersonate real companies and licensed financial service providers. They may copy a company’s logo, address, staff names and registration details onto a fraudulent website.

Compare the website and email address you have been given with the details found independently through an official register or the genuine company’s established website.

Look carefully for:

• minor spelling differences in the website address;
• additional words, letters or hyphens in the domain name;
• Gmail, Hotmail or other generic email accounts;
• recently created websites;
• telephone numbers from unexpected countries;
• copied staff photographs or biographies; and
• contact details that differ from official records.

Do not use the telephone number or link contained in the original message to verify the provider. Find the company’s contact information independently and ask whether the person, website and investment offer are genuine.

The FMA’s warning about entities falsely claiming New Zealand registration shows why this additional step is essential when avoiding investment scams.

7. Examine payment instructions carefully

The destination of the payment can reveal inconsistencies that are not obvious from the investment documents.

Stop and investigate if you are asked to pay:

• an individual when you believe you are investing with a company;
• a company with a different or unrelated name;
• an overseas bank account when the provider claims to be locally based;
• several different accounts for what should be one investment;
• by cryptocurrency, gift card or another difficult-to-recover method; or
• a different account after the payment was originally arranged.

Ask why the account name and location are appropriate. Independently confirm the payment instructions with the genuine provider.

Do not accept an explanation simply because the person sounds confident or appears to know details about the investment.

8. Watch for fake profits and withdrawal problems

Some fraudulent investment platforms display an online balance showing rapid profits. These figures may have no connection to real investments or funds.

Scammers sometimes allow a small initial withdrawal to build trust and confidence. Once the investor commits a larger amount, withdrawals are often blocked.

You may then be told that you must pay additional:

• tax;
• insurance;
• security deposits;
• transaction fees;
• account verification charges; or
• regulatory or legal costs before your funds can be released.

Requests for more money to access your own investment are a serious warning sign. Paying the requested amount commonly leads to another invented fee rather than the return of your funds.

9. Keep personal information secure

Do not provide any identity documents, banking credentials, passwords, remote access to your computer or one-time security codes unless you have independently established who you are dealing with and why the information is required.

Be particularly cautious if someone asks you to install remote-access software so they can help you establish an investment account or make a payment. This may allow them to view your banking information or control your device.

Never allow an investment promoter to log in to your bank account or transfer funds on your behalf.

What should I do if I am concerned about a payment?

Do not send any more money until you have completed independent checks.

If you are using Tasman FX to transfer funds for an investment and something about the investment or payment instructions concerns you, speak with your Tasman FX dealer before proceeding. We may ask about the purpose of the payment, how you found the provider and how you have verified the identity of the beneficiary to help you avoid investment scams.

These checks can help identify inconsistencies, but they do not mean that Tasman FX has investigated, approved or endorsed the investment. You remain responsible for obtaining appropriate financial advice and doing your own checks before deciding whether an investment is suitable and legitimate.

What if I have already sent money?

Act quickly:

1. Stop all contact with the suspected scammer.
2. Contact your bank and any payment or transfer provider immediately.
3. Save emails, messages, payment instructions, website addresses, account details and screenshots.
4. Do not pay anyone who promises to recover your money in return for an upfront fee. This may be a second scam.
5. Report the matter to the relevant authorities.

New Zealand investors can report an investment scam to the FMA. Australian investors can use the Moneysmart investment scam reporting guidance and report the matter through Scamwatch.

The final check before investing

Before sending your money, ask yourself:

• Do I understand exactly what I am investing in?
• Have I checked the provider through official registers?
• Have I confirmed independently that the website and person are genuine?
• Does the beneficiary account make sense?
• Am I being promised high returns with little risk?
• Am I being pressured to act quickly?
• Would I still proceed if someone I trusted reviewed the opportunity with me?

If any answer leaves you uncertain, pause. Taking another day to check an investment is far better than discovering later that your retirement savings have been sent to a scammer.

This article provides general information only and does not constitute financial or investment advice. Consider obtaining advice from an appropriately licensed financial adviser before making an investment decision.