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FMA keeps close watch on Covid-19 misbehaviour

The Financial Markets Authority is warning that it is keeping a close eye on the financial services sector as the country grapples with the fallout from the Covid-19 disruption.

Tuesday, April 7th 2020, 8:41PM 1 Comment

It revealed on Tuesday that it had contacted an RFA – whom it would not name – over misleading social media posts about the virus.

The posts, written like news articles, cited costs for Covid-19 hospitalisations in China – supposedly up to $250,000 – before recommending people living in New Zealand get health insurance to avoid the same financial risk, especially young children and the elderly.

The advertorials failed to mention that in New Zealand, emergency treatment and testing for Covid-19 is free, as it is covered by the public health system. The Ministry of Health says anyone with an infectious disease is eligible for publicly-funded health services. Citizenship and immigration status are not relevant, nor is their length of stay in New Zealand.

Director of regulation Liam Mason said Covid-19 misinformation was not a widespread problem but the FMA had redeployed people to conduct surveillance focused on anything that looked like taking advantage of the outbreak, or market volatility more generally.

Consumers needed to look out for those opportunists and be aware that they needed to be vigilant, he said. Scams were also more likely as people might have more time to engage with scammers, and because they might be under pressure that made them more likely to pay attention to scammers who preyed on their fears. “We’re not going to put up with that at all.”

Mason said most advisers seemed to be concentrating on supporting their clients through the upheaval. But he said it would be a hard time for some.

It was sometimes harder to get people to think about long-term things when their attention was confused on challenges in the present, he said – but that long-term thinking was the job of an adviser.

“Some advisers are having a tough time.”

He said the FMA was doing what it could to take the pressure off advisers so they could focus on what was happening for their clients and get them through.

Financial Advice NZ chief executive Katrina Shanks welcomed the action taken against the unnamed RFA.

“This is not the sort of thing that should be happening at this time and we support moves to stamp it out. We are alerting our members to this.

“People with infectious diseases in New Zealand do not need health insurance – everyone is covered by the public health system – and we are reinforcing that.

“When people consult a financial adviser at any time, let alone during such uncertain times as we are currently experiencing, they must be able to do so with confidence knowing that advice is fair and lawful and based on the latest and most accurate information available.

“These are the behaviours Financial Advice NZ and its 1,600 adviser members live by every day. We will continue to pour all our efforts into supporting and advising consumers through these volatile times, and support any steps the FMA takes to stamp out behaviour that attempts to take advantage of the stress people are going through.”

Tags: Covid-19 Financial Advice New Zealand FMA

« Managers ramp up communication[The Wrap] The state of financial services two weeks into lockdown »

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Comments from our readers

On 13 April 2020 at 8:37 am LNF said:
Medical care in the USA following a motor accident is very expensive. Is anyone in NZ going to buy insurance in NZ based on that. I don't think that the public is that stupid. This case sounds more like a RFA of a certain ethnicity trying to scare people with the same ethnicity. This predatory behaviour is in most occupations and we read about it frequently
Give the general public some credit for intelligence

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Last updated: 11 August 2020 8:24am

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