This article was published on 29 April 2017. Some information may be out of date.

QI am a reader who lost $NZ150,000 by investing in binary options.

My investment was insured against loss. I have a document naming a well known insurance company. This is false. The insurance company says it has never heard of the binary options company.

I am retaining a law firm in Israel to recover my funds. But I would like New Zealanders to be aware of this scam. They advertise that Warren Buffett and people like him with profiles in the finance world promote binary options. It’s a multi-million scam. Read the Times of Israel.

It sounds great, and you may make a profit on paper, but getting money back into your bank account is difficult or impossible. The broker just stops answering all messages. I was told my broker had died.

AYou’re far from the only one who has lost money in binary options.

According to the Financial Markets Authority website, “Binary options enable you to make (or lose) money by predicting the short-term movements in the price of a share, commodity, currency or index.

“They may promise to make you money quickly, but like gambling, you could lose all of the money you’ve invested. We think binary options are very high risk, even for experienced investors.”

The FMA lists the following “key things to know if you’re thinking of investing:

  • “Binary options aren’t generally regulated in New Zealand, so you need to take extra care before investing.
  • “Slick marketing techniques make it look much easier (and safer) than it really is.
  • “There’s a very high chance you’ll lose money.”

It adds that “binary options may also be known as ‘all-or-nothings’, ‘fixed return options’ or ‘digital options’.”

As you say, the Times of Israel has many interesting articles on the subject — including a disturbing account from an undercover reporter who spent a day training as a binary options salesman.

One March article starts, “The FBI this week placed a large warning to the public against binary options fraud at the very top of its main website, above even its “most wanted” and “missing persons” alerts, underlining that the widely fraudulent, multi-billion dollar industry, centered in Israel, has become a top priority of US federal law enforcement.”

Good luck with the Israeli law firm. It’s usually really difficult for New Zealanders to get back money from overseas-based scams, but hopefully you are an exception.

Thanks to you, other readers have now been warned. For more from the FMA, see

And next time you — or any other reader — is tempted by a new type of investment, check out the, and also the government’s Scamwatch website, at

QLast week you seemed to equate judges with being bright enough not to get scammed — because they aren’t stupid. Sorry, but it’s a bad analogy.

In my view, judges often make bad decisions.

What about using retired financial advisers next time? But maybe not because some of us don’t think a lot of them either!

AFor those who missed last week’s column, a correspondent who was broke in her 60s said, “We are very stupid and got conned”. I responded, “Not all con victims are stupid. I’ve heard of retired judges being scammed.” The idea was to stop her beating herself up.

But let’s not dwell on who is stupid. The main point is that scammers can fool anyone, as our correspondent above found out.

Avoid any investments sold by phone, mail, email or a seminar. Never give in to pressure to sign up fast. And if you don’t fully understand where the returns come from, stay away.

Most of us know to avoid investments that are too good to be true. But scammers realise that, so they often offer really good but not ridiculous returns, to try to gain credibility.

Always ask yourself why a stranger is offering you a deal. If it’s so good, why don’t they just do it themselves? They get their big reward not from the investment but from conning you.

And it’s not only strangers that can pull you down a financial hole. Don’t be enticed just because someone you trust — perhaps a community leader — recommends an investment. Sometimes the leader is conned, and given high returns, in the hope he or she will sign up others. Then suddenly the “market” collapses.

QAfter reading your most recent column, I felt quite sad for the lady who outlined the situation she (aged 67) and her 60-year-old husband find themselves in — i.e. broke. I have certainly done a few silly things financially so “there but by the grace of God go I”.

I have often wondered what I would do if I found myself in their sorry situation. The bloke, being younger, could cut and run and try to hook up with a younger and financially sound lady of course!

But if they stick together there are a couple of avenues I feel are worthy of consideration:

  • Given that the husband is a builder and likely to be handy, and his wife sounds articulate enough, I reckon they should try to find a position which provides accommodation as part of the package — e.g. building managers, or running one of the storage facilities which have an on-site flat for the manager.

    The hubby could still be out doing part-time chippy work. Maybe he could make things like garden furniture, planter tubs, or similar (possibly using timber offcuts) and sell them too?

  • The lady should join up with one of the Avon, Nutrimetics, etc style of operations. For a modest initial outlay she can mix with some go-getters, make a bit of money, and as she will be self-employed she will be able to claim a tax deduction for her home office, some vehicle running costs, etc.

    If she succeeds there are all manner of bonuses — overseas trips, cars supplied, etc. I personally have known several older ladies who have done exactly that.

It goes without saying that if they smoke, drink more than a very modest amount, blow money on frivolous crap, they need to knock all of that on the head pronto! The only retail outlets they should go near are the supermarket (with a list — and stick to it) and the petrol station (no coffees, pies, or “specials” — just the petrol!)

I wish them well.

AThe woman could also “cut and run”. But that hardly solves the problem for the couple, so let’s concentrate on that.

I like your first idea. And the second one could work admirably for the right woman. Your budgeting advice is sound too — if brutal. More suggestions from other readers next week.

QI read the comments last week about the purpose of the unemployment benefit, and the reader’s suggestion that superannuation should be means tested.

I absolutely support the unemployment benefit for those who use it as a hand up. And I commend the writer who during their time on the dole went to uni and got requalified.

However, we have a small sector of society that use the dole as a lifestyle — not that I have any better ideas on how to solve this, sadly it is just a function of the system. (BTW I don’t mean those that legitimately are unable to work either).

As for superannuation, I wish people would recognise that most of the people receiving it have worked all their lives, paid taxes and earned the right to receive the money. And if along the way they have earned extra cash to make it more comfy, good for them.

I sincerely hope we don’t go to means testing. That will mean those that work hard are penalised again, while those that sit around all day on the dole get everything handed to them again, without having earned it.

As a random aside, why do we tax payments such as unemployment and superannuation payments. Why not just pay a straight amount?

AOn the “dole bludger” problem, there’s no way to find out, for certain, whether someone is a bludger without treating roughly those in genuine need. It must be a fine balancing act.

I take your point about means testing NZ Super. Our current system works well in that there are no disincentives for people to save for retirement.

I suppose we tax super and benefits because many recipients also earn other income. And the higher your total income the higher your tax rate. So it’s probably simplest to make government payments part of the tax system.

QWhilst I agree with the sentiments in the Criticising Benefits letter last week — and yes a benefit is necessary for many — I wish to clarify some of the language thrown around re this.

The over-65 superannuation provided to all New Zealanders is NOT a benefit. It is an entitlement or pension paid by government. They claimed since it began, “We tax you highly, but we will give you this entitlement when you retire.”

Having just turned 65, I certainly don’t consider myself a beneficiary. I, like others, throughout my life have been told by governments that this entitlement is mine as of right, along with any New Zealand billionaire. I have paid for it. It is factored in for many people as part or all of their future living allowance.

I have no issue with the conditions changing in the future. I could have accepted change years ago, as long as people have a fair lead-in time for change.

However, I must point out not every beneficiary should see their benefit as an entitlement! Those who are capable of contributing to NZ society and our country should not believe they are entitled to it.

ADespite what any past governments might have said, none of your taxes have been put aside for future pensions. The money you paid the government over the years was spent on healthcare for you and your family, education for your children, policing your streets — and pensions for people who were then retired.

Before I get flooded with angry letters, I’m not saying you don’t deserve NZ Super. You helped to pay your parents’ super, so it’s probably fair enough that your children help to pay yours. Let’s not debate that.

But does it really matter what a recipient of NZ Super is called? Be honest now. Are you just a teeny bit worried about being associated with people you don’t admire?

Perhaps concentrate instead on how fortunate you are to receive a bigger pension — relative to wages — than younger people will probably get.

As Shakespeare might have said, a superannuitant by any other name is still pretty lucky.

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Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.