What the scam is
Scammers are running a “pump and dump” share scam that is already catching out New Zealanders.
They buy cheap overseas shares, hype them up online so the price jumps, then quickly sell and leave the remaining investors holding the shares as they crash in value.
How they approach you
- You might see a Facebook or Instagram ad using the photo or video of a well‑known Kiwi business leader, inviting you to join an “exclusive” investment group or chat. You might have seen news articles where several well-known New Zealanders have had their identities used in these scams without their knowledge or permission.
- Once you join a WhatsApp or similar group, you’re guided by a so‑called “mentor” who tells you what shares to buy and when.
How the scam plays out
- At first, they may suggest buying big, well‑known US companies (like major tech stocks) to gain your trust.
- Later, they switch to little‑known, low‑priced overseas shares and pressure everyone in the group to buy them, which pushes the price up artificially.
- When the price has risen enough, the scammers sell their own holdings; after that, the price falls hard and the Kiwis who followed the tips wear the losses.
Second scam: fake “compensation”
- After you lose money, the same or linked scammers might contact you saying you’re entitled to compensation or a refund.
- They then ask for copies of your ID, bank details, or extra “fees” to release the money; this is just another scam to steal more money and personal information.
How to protect yourself
- Treat all investment ads on social media with caution, especially if they feature famous New Zealanders or promise easy profits.
- Do not act on investment tips from random chat groups or people who contact you out of the blue; check that anyone giving you financial advice is properly licensed in New Zealand (on the Financial Services Providers Register).
If you think you’ve been caught in a scam, stop all contact, call your bank straight away, and report it to the Financial Markets Authority and the platform (e.g. Facebook, WhatsApp).
