Watching fortunes rise and fall. The advice from the Financial Markets Authority - just hang up on cold callers. Photo / File
Watching fortunes rise and fall. The advice from the Financial Markets Authority - just hang up on cold callers. Photo / File
If some fast-talking salesperson gets on the phone offering assurances while trying to get your money, I recommend hanging up.
But this is what happens if you check every word they have to say.
I was called today by an unknown New Zealand mobile number which sounded oddly distant whena voice came on the phone.
"Hello, I'm calling from Income Class and I would like to tell you about how you can become an online trader."
It was the third call in a week from this outfit. Each call was from a New Zealand mobile phone number. I had hung up on the other two but the company didn't seem to have got the message.
I interrupted asking how Income Class got my number. She told me either I had provided it through one of its marketing campaigns, expressing interest in online trading, or one of their current clients had referred them to me.
I know the first didn't happen and I was dubious about the second.
And where was she calling from? The company was based in Covent Garden in London, she said.
Sensing perhaps my doubt, she attempted to put me at ease by explaining the company had a New Zealand presence and - this bit is important - was "regulated by the New Zealand Government".
They work hard at Income Class, and the caller whittered on with her sales pitch: "It takes none of your time! You can earn money when you're not working!"
"We're regulated by the New Zealand Government," said the cold caller selling online trading tools. Not true. Photo / File
Meanwhile, I searched up the company website. The name is so blandly generic, it isn't easy to find. That in itself is a warning. Most businesses want to stand out, not get lost in the crowd.
It said: "Income Class is committed to producing content and experiences that meet the highest journalistic and ethical standards."
Tremendous. I like high journalistic and ethical standards. It's even in my job description.
The next check wasn't quite so promising. Searching the registration details for the company domain name turned up a false front - the identity and location of the company was masked by a business called Domains By Proxy. It's sales line is: "Your identity is nobody's business but ours."
On whittered the cold-caller: "All you need to do is download our software!"
Checking back on Income Class website, I could see it repeated the claim my cold-caller made - that it was based in Covent Garden in London. It even provided a street address: "71-75 Shelton St, Covent Garden."
It's a real street. And if you search it on Google Street View, and zoom in, you can see it is a rent-a-desk business centre, with meeting rooms available by the hour. It also offers a "virtual office" service, so companies "based" there don't even have to be there.
Also on the website was a formal sounding company name. Enigma GRC Ltd. Enigma? Quite.
Fortunately, United Kingdom company records shed a little light. The company was formed last year. It has three directors - one based in Israel and two in Cyprus. There was no sign of the promised New Zealand presence.
Keen to find the local representative, I asked Google to look harder, and locally.
The London office of Income Class - rent rooms by the hour or base yourself offshore and have your calls redirected. Photo / Supplied
What actually turned up was a warning from the Financial Markets Authority, our regulator for the finance industry. As the salesperson tried to encourage me to part with US$500 for their most basic package (Earn money! While you're not working!), I read what the FMA had to say.
It was a warning. It was dated August 21 - recent - and the warning was bundled with another online trading "opportunity" which appeared to be targeting New Zealand.
I interrupted the sales pitch. "You know how you said Income Class was regulated by the New Zealand Government," I asked.
Yes, she said. "You're right," I replied, "although it's not exactly the way you explained it."
And then I read the following: "We recommend exercising caution before dealing with Profltlx and Enigma GRC Limited as both entities are not listed on the FSPR (Financial Service Providers Register) and are not incorporated in New Zealand."
Everyone in New Zealand in the business of providing a financial service, here or from overseas, has to be registered before they can legally provide those services.
At that point, my cold-caller hung up on me.
I rang the Financial Markets Authority and told them about my experience. I wasn't the only person who had made contact - hence the recent warning.
"We warn people to exercise extreme caution because it's impossible for us to chase these companies, who are not based in NZ and regularly set up new virtual offices with a fresh website.
"Our advice when someone receives a cold call is to hang up the phone. And never hand over money to a firm you've never heard of who rings you out of the blue."
The FMA says you should always carry out some form of verification before investing money. They also urge people to use financial providers licensed by the FMA - that way you know they are being watched and come to at least a minimum standard.
I think the FMA's advice is best - just hang up. Don't feel guilty. Don't tell them you're going. Don't say goodbye.
