Cold-calling telemarketers, salespeople at the door ... how do you know if the deals they're offering are genuine?

We regularly publish stories about people who are taken in by a plausible or high-pressured sales pitch. Put on the spot over the phone or at the front door, it's only later they find out they've been taken for a ride. Learn the right questions to ask with our handy checklist, and protect yourself from fraudsters.

General guidelines

Don't respond to any offers made in spam emails.
Don't respond to any offers made in spam emails.
  • Fraudsters will always try to assure you they are legitimate. Always be suspicious of any offer to sell you goods or services over the phone, by fax or email, or at the front door.
  • Distrust any business that says you don't need to check their credentials - it's not unreasonable to check things out for yourself and it's always a good idea to do so.
  • Look closely at the product or service being offered and ask 'why is it being offered to me?' Don't buy it if you don't need it. Don't be pressured into a purchase. The seller is in it for themselves, not you.
  • Look closely at any finance arrangements being offered. Ask yourself 'why is this deal being offered to me?' Do the financial amounts make sense? Have they complied with the Credit Contracts and Consumer Finance Act?
  • Don't respond to any offers made in spam emails. (Read more about spam at www.dia.govt.nz).
  • If someone contacts you, never give them your financial details or credit card numbers. However, if you contact an organisation and you're certain about what you're doing, then it may be OK to provide these details.

Questions to ask

Ask unsolicited callers where they got your contact details from and why they think you want what they're offering. Note down their answers.

Ask for everything in writing, including details of the product or service offered and full contact details of the person and business you are dealing with.

Look at the details you have been given and answer the following questions for yourself:

Is the person or organisation legitimate?

  • Is the organisation or company listed in the phone book? Try either www.whitepages.co.nz or www.yellow.co.nz. If it's not there then ask why. If you are told it's listed as one name and 'trading as' another, also ask why.
  • Does the organisation or company have a website? Go to the website and see how much information is provided. Is it a New Zealand site or an overseas one?
  • What is the street address and place of business? Use the Address and Postcode Finder tool at www.nzpost.co.nz to see if the street exists. If there is only a post box number provided, find out why there is no street address.
  • Have warnings been issued about this organisation or company? Search the Ministry of Consumer Affairs website and make sure they have no warning listed. Search for the name on Google to see what other people have to say about them.
  • Is it a member of any industry-based organisations? Check the website or phone the industry organisation to check they're a member.
  • Has anyone you know been contacted with a similar offer? Talk to your friends, family and work colleagues to find out if anyone else has received a similar offer.
  • Can they provide references from satisfied customers? Ask for references, and then check them!

Is the company legitimate?

  • If it's a limited liability company (its name ends in 'Ltd') check the Companies Office to see if the name exists and who the directors of the company are.

Is the charity legitimate?

  • If the company claims to be working on behalf of a charity or organisation such as 'Road Safety', a 'Local Authority' or a 'Government department', then ask for the name of the specific charity or association.
  • Contact the organisation yourself using the number in the phone book or other independent publication and verify that they are involved as claimed.
  • Check whether the charity is registered with the Charities Commission.

Is the publication legitimate?

  • If it's a publication touting for advertising insist on seeing a previous issue and ask for audited details of the publication's circulation and target audience. Check any back copy you get for an issue number and publishing details.
  • Check with the Magazine Publishers Association to see if it's a known publisher.
  • Beware of any company that has copied an ad you have placed in another publication. Never sign anything until you are absolutely sure it's genuine. Be aware that signatures sent by fax can be used fraudulently, even if you are refusing the offer.

Is the individual legitimate?

  • If you are being offered an 'opportunity' by an individual and you want to check their credibility, in addition to the steps listed above you can check the electoral roll at your local library.
  • You can also do 'Directors', 'Shareholders' and 'Banned Director and Manager' searches on the Companies Register to find out more information about them.

Do the answers add up?

If you were able to quickly and easily find the answers to the background check questions and received prompt, clear and consistent information, then you have gone a long way towards protecting yourself from fraudsters.

However, you may not have been able to get the answers you were looking for, or they may seem inconsistent or unbelievable. Trust your instincts. If you're not satisfied then don't do business with them. It's up to the other party to prove that they're legitimate. It's not up to you to prove they're not.

If your suspicions are raised, consider discussing your concerns with the Police, the Commerce Commission or the relevant industry body.

If you are dealing with a company and are suspicious of their credibility, remember you don't have to pay anything just because they say they have a contract. Get advice from a lawyer, Community Law Centre, Citizens Advice Bureau or other authority first.

Remember: if it seems too good to be true — it probably is.