Aucklanders lose $9.54m to online scams totaling $23m - report

As online scammers continue to ply their trade, unsuspecting Kiwis need to up their game by staying wary and reporting suspicions, particularly in Auckland where scam losses are highest.

Netsafe New Zealand data from July 2018 to June 2019 shows that of almost $23m lost to online scams, Aucklanders took the hardest hit with losses of $9.54m.  Wellingtonians lost $2.67m and Cantabrians lost $1.81m, with the single largest loss reported at around $5m and the average loss at $9,801.

Kiwis can protect themselves by exercising caution before sharing contact details, updating passwords and stopping to think twice about emails that entice or solicit immediate action.

Martin Cocker, chief executive at Netsafe, said that scammers are increasingly employing scare-tactics which piggy-back off personal data from online sources. 

"It is clear from the reports we receive that scammers are taking the time to set people up, often by using personal data available online.

"They are then using digital marketing techniques to create scams that appear authentic and are designed to mimic well-known organisations and processes that people trust," Cocker said.

The old adage 'If it seems too good to be true, it probably is,' has now become something more.

"It would be more accurate to say, 'Even if it seems like a reasonable deal, stop and think, 'Is this real, or [is it] a scam," Cocker advised.

Fake sextortian scams, which typically stem from a stolen password, are on the rise.

In a recent example, scammers pretended to have intimate recordings in order to blackmail recipients into sending money.  

"The reason why that particular [sextortian scam] was so convincing was that they [the scammer] put into the email header one of [the recipient's] passwords," Cocker told The AM Show on Monday.

"For many people, the reality is that they would've been looking at adult content, and they may have logged in using that password, so the scam would've seemed very realistic," Cocker added.

People who are unsure of their actions are most susceptible to risk and in this case, despite the scammers having no video as they claimed to have, some people were concerned enough to pay the ransom.

Online scam and fraud losses reported to Netsafe by category:

Although current Netsafe annual fraud data shows that the highest number of reports relate to product and services fraud, average losses for prize and grant fraud, romance scams and investment fraud are significantly higher.

  • Product and services fraud: 1641 scams reported, total loss $6.137m, average loss $3,740.19
  • Prize and grant fraud: 202 scams reported, total loss $5.59m, average loss $27,691.66
  • Relationship and trust fraud (romance scams): 184 scams reported, total loss $4.12m, average loss $22,396.22
  • Investment fraud: 169 scams reported, total loss $4.69m, average loss $27,770.05
  • Identity fraud: 38 scams reported, total loss $59,398.19, average loss $1,563.11. 

Examples of recent scams

An example of product and services fraud is an email or text message saying that the recipient has won a prize for a competition they hadn't entered before enticing them to provide personal details and often, payment to cover shipping.

"Often, people are told they have won a prize, [such as] a supermarket voucher or mobile phone, or that they could win a prize by completing an online survey," a Netsafe spokesperson said.

Bogus lottery and scratch card scams are also common and often hide behind professional mailers enticing people to scratch to win free or discounted trips.

"All of the scratch cards are printed as winning cards.  The instructions for collecting the 'prize' including asking the recipient to share copies of their ID and [to] make payment for [false] taxes and other 'administration' fees."

Netsafe also reported that there's an increase in relationship and trust fraud, where a friend or relative of the person targeted is impersonated by a scammer on social media.

"These impersonation accounts can be used to send messages that claim both the sender and recipient have been awarded a prize or grant, and this trusted person [under the guise of being known to the recipient], confirms that it is genuine."

Fraudulent investment schemes are generally offered by email or cold call and can direct a person to a bogus website that accepts payment details and portrays an increasing balance.

"Most follow a similar pattern, where the scammer claims there is a 'practically guaranteed' return on investment and [often uses] the names of well-known companies to make the offer appear more genuine.

"When it comes time to withdraw the balance, the scammers demand payment for 'administration' fees or taxes and personal information and don't release the funds that are owed," the spokesperson added.

More sophisticated variations of an investment scam can include returning small amounts of money to the recipient to make the investment appear more genuine.

"Unfortunately the numbers reported to us represent only a small percentage of the total losses in New Zealand as many people still don't know where to go for help with an online safety challenge," Cocker said.

As many scams operate outside of New Zealand, online scams and fraud can be difficult to police.

"This means that scam targets are very unlikely to recover any money they lose, which is why more coordination and support is needed to protect Kiwis," Cocker added.

Netsafe's goal is to continue to partner with companies to educate people on how to protect themselves and coordinate national efforts to disrupt scams.

Kiwis who are blackmailed into paying money or who come across an email or contact which isn't genuine are encouraged to contact Netsafe to report it and get help.