Overseas investment scams seem to be targeting New Zealanders, in particular those running small businesses, says the Securities Commission.
Commission senior executive (operations) Norman Miller told Parliament's finance committee this week that New Zealanders lost $14 million a year to false stockbrokers, which was just the "tip of the iceberg".
Miller was
not certain why the fake brokers seemed "particularly to [target] this country" or why "they target people that operate small businesses", but it was believed they used the Yellow Pages.
He said "boiler-room" operations were cold-calling people and trying to persuade them to buy low-value technology stocks usually in the US.
But when the sale was made the operators, usually based in Jakarta, Bangkok or Manila, simply pocketed the money.
"When you try to realise your investment the broker becomes very difficult to contact," Miller told MPs holding an inquiry into fraudulent investment schemes.
The commission said it was difficult to track down those running the scams despite co-operation with overseas agencies. Once the money left New Zealand it was "impossible" to recover.
Many of those who lost money were too embarrassed to co-operate with officials and did not heed warnings to deal with local brokers when investing overseas.
- NZPA
