Financial scams are becoming increasingly prolific, as well as more sophisticated at targeting even the most vigilant people. Many scams that people get targeted by here in NZ are likely run by criminals overseas, and once you give them any money it can be very hard to get back. Whether someone has transferred money to a local or overseas entity, it’s probably not going to be anywhere near where the money ends up. So our team has put together some tips on what to watch out for and how to potentially avoid being scammed out of your hard-earned money.


Scams in New Zealand

Let’s start with some topline statistics around scams in NZ - how bad is it? According to FMA research, one in five Kiwis have already been targeted by an investment scam. And that’s just a small proportion of the financial scams seen targeting people…The government-run Cert NZ, which specifically deals with people and businesses affected by cyber security incidents, releases a quarterly report on cybercrime in NZ which show some worrying stats in 2023:

- Text message based phishing (which funnily enough, is referred to as “Smishing”) is very much on the rise - reports to the agency have increased around 26% in the recent quarter

- Financial losses reported specifically to CERT NZ  in the first quarter of 2023 were up by over 60%, to almost $6 million for the quarter

- They also report that AI is likely helping scammers - with the scammers using AI tools to write more convincing phishing emails in potentially multiple languages, create malicious code, and even impersonate people in live chats!

Many of the banks also do their own research and provide useful insights and guidance for consumers to avoid being scammed. BNZ released a report in August this year reporting that there’s been a significant jump in scam activity over the past 12 months, estimating that 9 of 10 Kiwis have been targeted (this is up 13% year on year). Thankfully, we seem to be getting more scam-savvy over time, with around 1 in 10 falling victim to the targeted attempts made by scammers. Of those who do lose money, 69% lose under $500, 26% between $500 and $5000, and 5% over $5000. Email is still the most common channel being used, but text message scams are on the rise as well as social media, and phone calls are still popular when it comes to targeting older audiences.

This all sounds pretty worrying - but the positive side, BNZ reported that around two thirds of people surveyed said they’d seen educational communications around scam prevention, and had some knowledge of what to watch out for.

So on that note, what are some common scams to potentially “watch out” for?


Common scams

This list is not exhaustive in any which way, but may help you understand how scammers commonly operate and even better, allow you to share warnings with others who may be vulnerable:

- Text messages from your financial services provider - often banks, but also insurance providers and others, allegedly  asking you to click a link to stop a major problem happening (usually with some urgency).

- Emails, social media accounts or text messages claiming that you have “won” a prize or grant - also asking you to click a link to redeem it.

- Investment scams, where companies promise unrealistically high returns and guarantees that regular financial providers can’t match (often with little apparent risk).

- Cold calls from your bank or other financial provider, impersonating the fraud team asking for personal information to secure your account.

- Social media scams (usually from fake profiles or businesses) demanding that you take action and click links to avoid being locked out of your social media account.

There are several red flags you can watch out for to distinguish scams from legitimate communications. Unsolicited or unexpected emails, texts, calls and other messages asking you for any form of personal or financial information is a big one. Always verify properly who’s contacting you and make sure they really are who they say they are, before you ever provide information. Investment companies promising unrealistic promises or claims (especially from companies that you don’t recognise) are also commonly associated with scams. It can be pretty quick in these cases to verify, by doing some Google research - check their reviews, see if you can find any third party verification and keep your guard up. High pressure tactics are really common in scams, as scammers often rely on a sense of urgency preventing their targets from having too much time to think it through and assess the situation. Having outdated software running on any of your devices (especially computers) are another common issue, as this can leave you vulnerable to attacks. So can re-used and simple passwords for your financial accounts - a big no-no!

Tips for keeping your online data more secure:

On the subject of keeping your data secure when it comes to your personal finances, Simplicity’s head of technology Amir has a list of recommendations to avoid potential compromises:

Enable Two-Factor Authentication (2FA): 2FA is one of the most crucial security features you can use. Most financial providers will offer this kind of protection to add a layer of security to your accounts. Enable it!

Use Strong, Unique Passwords: Create distinct passwords for different logins, avoiding reliance on a single password across multiple systems that could be leaked/hacked.

Keep Your Password Confidential: Never share your password or other login details with anyone, even your family. An organisation shouldn’t and won’t ask you to give them your password via direct comms, ever. So it’s a red flag if they do!

Take Phishing Seriously: If you receive what you think might be a suspicious email, text or DM, be careful - seek help if you need from your provider. Don’t click ANY links that you’re not sure of!

Report Security Incidents Promptly: If your email is compromised, please contact us immediately. Similarly, if any of your accounts with other financial institutions experience a security breach, reach out to us without delay.

Cybercrime really is a major problem for Kiwis, and around the world. In a nutshell, it can pay off to be as vigilant as possible when it comes to protecting you and your whānau. Don’t share your personal data (that includes your login and password details!) with ANYONE, even if it is someone that you’re really close to. If you do know someone that has fallen prey to a scam (or if it’s happened to you), always report it to the relevant organisation or authority. In the case of financial services scams, this includes the FMA which is the regulatory body of the financial industry.  

The information provided and opinions expressed in this post are intended for general guidance only and not personalised to you. These materials do not take into account your particular financial situation or goals and are not financial advice or a recommendation. This post is not intended to convey any guarantees as to the future performance of any of the investment products, asset classes, or capital markets mentioned. Past performance is no guarantee of future performance. Information is current at the time of posting, and subject to change without notice. Simplicity NZ Ltd is the issuer of the Simplicity KiwiSaver Scheme and Investment Funds. For Product Disclosure Statements please visit our website simplicity.kiwi