New Zealand's financial markets watchdog warns it is being impersonated by scammers as part of an international money transfer scheme targeting those affected by Covid-19.

The Financial Markets Authority (FMA) said it was contacted by a woman on August 5 who had fallen victim to a fraud after trying to transfer a significant amount of money from China to New Zealand.

She said she saw an advertisement on a community news outlet offering money transfer services, and arranged the transfer via the social media platform WeChat. The money was sent to a bank in Inner Mongolia, the FMA said in a statement today.

The woman explained her family had been "stranded in New Zealand" because of the global coronavirus pandemic and needed money for living expenses.

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However, the funds didn't arrive, the FMA said.

The woman was told it had been "frozen" by the FMA due to money laundering suspicions.

She was also phoned by a man posing as an FMA official, who falsely claimed she would need to pay more to release the original sum.

Unfortunately, she did.

FMA director of regulation Liam Mason said the woman's case was troubling.

He said the scam was targeting those affected by the pandemic and then involved impersonation of a government agency to steal more.

"We are trying to ascertain if the scammer is in New Zealand, as they appear to have had some local knowledge, and also if anyone else has been defrauded by them," Mason said.

He offered some advice for people to protect themselves from such swindles.

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"Be sure to only transfer money through businesses on New Zealand's Financial Service Providers Register," Mason said.

"Don't fall for the scammers' line that you must pay more money to release your original funds. And know that the FMA would never freeze money remittance or ask you to pay any money."

The FMA has also issued an alert about such scams on its website last Wednesday.

Mason also asked anyone with information about Mongolian bank case, or any suspicious money transfer providers, to contact the FMA via questions@fma.govt.nz and in Chinese text if preferred.

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