Could your next online financial course be a scam?

Updating you on the latest scam trend to hit New Zealand.

Have you ever wanted to learn how to invest or get better at maximising your investment returns? Whatever your investment interests are - crypto currency, foreign exchange, or the share market - there are plenty of Kiwis who are interested in educating themselves about their finances, which means there are even more scammers out there trying to take advantage of them.

Scammers are smart and know no bounds, their language is always changing, their processes are getting more sophisticated, and they are always inventing new schemes to lure their victims in. Online fraudsters are now targeting those who are looking to educate themselves on how to invest their money with fake financial investment courses. Using targeted social media ads, scammers entice rookie investors to sign up to financial investment courses to "receive the help they've been looking for" and make "big returns". The ultimate hook, line and sinker.

Ads promoting how to "make money fast", "learn how to invest", or "invest in your future through our fast online course" are often riddled with online pretenders and scammers hoping to gain your trust in exchange for your personal and account details.

This new type of scam is quickly becoming a big problem in Australia, and ASB's fraud team are warning Kiwi customers that it's making its way to Aotearoa fast.

"Working closely with our parent company, the Commonwealth Bank of Australia, we have seen that the number of victims there is rising rapidly," says fraud technician Parmanu Singh.

"We want to front foot this in New Zealand. We are starting to see it here too, but it’s in a really early phase. We need to get the message out there before it becomes widespread.

"We can do this by ensuring our ASB people are aware of it, as well as educating customers."

Social media is one of the busiest places for online scams, simply because of its impulsive nature. These ads will often offer "great deals" or "discounts" which tend to get many hits on social media.

"If I were to break down the process for you on this type of scam, it starts with someone seeing an advert on social media on a topic they have previously shown an interest in, for example by looking up a specific term on a search engine. They may then click on the ad, converse with the scammer and then be taken over to a messaging app group to communicate directly.

"It doesn't start off urgent, there is conditioning and priming of the victim before they will ask for your money down the line."

"This is where a very sophisticated process of social engineering comes into play. At first, a scammer will do what they promised and provide education, for example, how crypto investing works and how to initiate the investment. However, after some time, they will lead you on to other fraudulent offers.

"They will tell you 'Hey, if you want to double your returns, this is the right time to invest'." Singh warns us that in a normal circumstance a financial advisor or authentic investment course will never communicate with you exclusively through a messaging app or text message – this is a huge indication you may be dealing with a scammer.

Singh says traditional scams are much easier to spot as they usually offer something that is too good to be true.

"But in this case, they are promising to educate you. They are targeting your eagerness and your ambition to get better at something."

Scams like these are subtle because they don't have the typical red flags we are starting to recognise, like creating a sense of urgency, bad grammar, texts/emails telling customers they owe money, urgent bill payments, mail collection, and unsolicited texts or cold calls.

However, there are other pitfalls to look out for when it comes to these investment education scams such as a non-accredited company running the advertisement, flashy "too good to be true" advertisements on social media and communicating through third-party messaging apps and unlicensed URLs.

Through ASB's various scam updates this year already, customers are becoming more aware of the dangers of common text and email scams.

"It is a massive concern. One of the challenges in our field is that we are never up against any one factor; it is always multiple types of scams, and this investment education scam is one we are keeping a very close eye on."

The biggest deterrent for scammers is to be patient and do your due diligence by thoroughly investigating the company and people you seek to invest with.

"Do your research, call the company directly, take a deep breath and be very aware of things that are unsolicited, especially those ads that are offering very high returns. Consult with someone who is licensed, like a financial advisor."

Take a sec to check if an organisation has been flagged by the Financial Markets Authority at fma.govt.nz/scams. This is not a foolproof system if the FMA have not yet picked up the scammer to alert on their website, but it is a quick check that may save you.

For more information on current and emerging scams and how to stay safe, check out ASB Scam Hub.