FMA reports a noticeable decline of financial scams in New Zealand
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The Financial Markets Authority (FMA) recently issued its 2023 annual report that shows the number of potential financial scams, as well as the activities of unlicensed businesses, has seen a significant decline in New Zealand. The company compared the number of financial fraud cases in the last several years, finding that the drop in illicit activities seemingly started in mid-2022.
A rise in website impostors
The latest report also pointed out that there has been an increase in a number of websites trying to impersonate registered entities. These are the sites that seek to offer financial and trading services to retail users.
The regulator’s report has touched upon a number of major issues, including significant regulatory actions that the financial watchdog had to take. The most notable case revolves around Validus, which promoted its investment services at offline events.
The FMA has found that the promotions were misleading and dishonest, and it issued a permanent stop order against the company and its associates earlier this year, in May.
The regulator is one of the most active financial authorities in the world when it comes to issuing warnings against suspicious or unregistered businesses and preventing them from defrauding retail users. However, the number of alerts and warnings has dropped significantly in 2023.
FMA report shows a decrease in the number of scams per year
According to the regulator, the number of suspected scam alerts was 47 in 2023, compared to 105 in 2022 and 89 in 2021. The number of detected unregistered businesses offering services illegally was only 17, compared to last year’s 48, and 24 in 2021.
However, there has been an increase in the number of cases where fraudsters attempted to use a fake regulator to prove their legitimacy to potential victims. In 2023, there were 4 such cases, while there was only one in 2022 and only two in 2021.
As mentioned, the number of imposter websites has skyrocketed, with 29 reports this year, compared to no reports in previous years. In total, the number of warnings and alerts in 2021 was 96 — a figure that then jumped to 111 in 2022, only to drop to 89 in 2023.
That means that despite the addition of the imposter websites category and having it feature 29 warnings, this year is still significantly better than two previous years in terms of financial fraud cases and warnings.
Furthermore, with the regulator’s continued activity and effectiveness when it comes to identifying scams, the trend was interpreted as the growing safety of the local financial market.
FMA’s chief executive, Samantha Barrass, commented on the findings, saying that the FCA is creating a rock-solid foundation for a genuinely fair financial system — something that was made possible thanks to its partnerships with the government, stakeholders, and the entire industry. The new state of things wil ensure that the markets are trusted due to their transparency and integrity, which will enable responsible innovation and further growth.
