Simon's father-in law said he was told the companies were well-known and he had a number of conversations with people at the investment company, including the vice-president.
"That was the first alarm bell. I said: 'don't invest any more money with them until the first return gets paid'."
Simon checked out the company's website and its amateurish look convinced him they were scammers.
Richard had already filled out a form with his personal information, including the fact that he had a mortgage-free home and was in a philanthropic job prior to retirement.
"They would have picked that up and played on it."
His father-in-law initially said he found out about the company through an advertisement in the paper. However, Simon couldn't track down the advert and did some research, and now believes the first approach may have been via a phone survey.
An early investment of $10,000 spiralled into $80,000 after the company began calling his father-in-law three times a week.
The conversations ranged into personal subjects and then when Simon's father-in-law said he couldn't invest any more he received an emotional call from a man who said he was going to lose his job if the investing didn't continue.
"They pulled on the integrity lever which would have been hard for my father-in-law as he is a man of integrity."
The $80,000 was about a third of the cash investment money his father-in-law had and Simon believes his father-in-law also tried to borrow from the bank to keep investing without success.
"I just kept telling him these guys are scamming you."
He also tried to divert the calls by telling his father-in-law to ask the company to call him instead.
He got a call from the scammer and says the man went "off his rocker" when accused of the fraud.
"I just hung up on him."
In another call, Simon was accused of taking his father-in-law's money for himself.
But once he told them he would report the company to the Financial Markets Authority - New Zealand's investment regulator - the calls stopped.
Simon says losing the $80,000 probably won't make a lot of difference to his father-in-law.
"I think the humiliation and embarrassment is probably greater. It is not a disaster story, it is just a sad news story."
"Hopefully they and others might learn from it."
While the names have been changed, the story is true and is being highlighted by the Financial Markets Authority as part of International Fraud Awareness week, which runs from November 11 to 17.
An FMA spokesman said a typical warning sign that a family member was caught up in an investment scam was a call out of the blue offering shares in a well-known company for a quick gain.
"They'll be persuasive and clever at showing how the investment will help.
"Once an initial investment has been made, they'll ask for more money. They may tell your family member or friend the sale can only go ahead if they purchase more shares, or there are taxes to be paid."
The spokesman said the best things to do to help were to act sensitively and talk to them about how they were initially contacted.
"Scams almost always come through cold calls."
The FMA urged people to research companies online to help check if an investment was legitimate.
If it is not, then stop all contact with the scammer and help the victim contact their bank immediately to report it.
