FMA Warns of Increased Investment Scam During the Covid-19 Pandemic

New Zealand financial regulator, the FMA is warning investors of a sharp rise in the volume of investment scams. How can you protect yourself from these types of scams?.

November 19, 2020 | AtoZ Markets – New Zealand’s Financial Markets Authority (FMA) disclosed on Wednesday that there has been a rise in investment scams. According to the Qiwi watchdog, one in every five locals was in some way a target by a financial scammer.

These all have the common variable of occurring during the COVID-19 pandemic. The most common technique for fraudsters is to impersonate regulated FX businesses in the country.

FMA warns investors to beware of a rising volume of investment scams

The FMA discovered 61 investment scams in the period spanning from April 1st to November 5. Out of these, 21 were imposter scams that fake social media accounts or had entirely fake websites as part of their schemes. The watchdog further warned users that many fraudulent groups were downright impersonating the FMA itself in order to transfer money more efficiently.

The license issuer urged users to become more vigilant by educating themselves on how these scams function. Moreover, the FMA asked them not to trust high return offers, as this is one of the most popular lures used by scammers. The regulators revealed that the best technique is for clients to be always skeptical, and always question higher retund opportunities.

The pandemic has given rise to investment scams all over the world, mostly profiting from the fear that the virus has induced in people. The most popular scams are those that involve cryptocurrencies.

How to protect yourself from coronavirus cryptocurrency scams?

There are lots of legitimate charities, investment platforms, and e-commerce sites that accept payments in digital assets today. However, when a person sees the pressure to use primarily cryptocurrencies, he should approach it with more caution.

Additionally, people need to entirely verify the legitimacy of any vendor, charity, or investment opportunity before sending funds. In case of a blackmail or extortion attempt, the victims should contact law enforcement before deciding to pay the demanded amount.

People must be extremely vigilant when someone requests their bank account information. Those are generally the most significant red flags in terms of potential scams.

It’s worth noting, though, that a recent analysis pointed out a more positive development on the matter. Cryptocurrencies lost to COVID-19 scams had peaked in mid-March but since then are gradually decreasing.

Regulators remain alert against rising scams

Apart from the FMA, many financial regulators are also warning about crypto-related financial scams which became rampant with the COVID-19 pandemic.

The Commodity Futures Trading Commission (CFTC) earlier warned investors against fake investment opportunities on stocks related to the coronavirus cure. Multiple UK counties along with several European regulators also warned locals against rising scams using COVID-19 fear.

Have you fallen victim to a crypto COVID-19 scam? Share your experience with us in the comment section below.

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