Relationship scams are becoming more sophisticated, with many scammers taking months to build trust and form a 'legitimate' online relationship before asking for money.
That's according to online safety company Netsafe, which says scammers have moved on from eliciting money using stories that pull on the heartstrings, such as illness or needing money to leave their country. Now, they're more likely to suggest investing through a particular cryptocurrency platform or talk about how they made money from bitcoin.
Netsafe's latest report shows 2875 online scams were reported by Kiwis in the first quarter of 2021. Total reported scam losses were $5.316 million, up 21.3 percent on the December 2020 quarter.
This year's biggest romance scam has cost one unlucky Kiwi $578,862.39, and with 54 reports to Netsafe totaling $1.5 million, these scams are on the rise.
As people are connecting more frequently and meaningfully online, Netsafe says it's become more realistic for scammers to put time into emulating a genuine relationship which "can take months". Dating websites are used as a "hook" to lure people into 'investing' their money.
Netsafe CEO Martin Cocker said if they're asked for money and there's not an existing relationship in place, people are likely to be sceptical. But one they get to know someone, that's not always the case.
"That's why we're seeing a rise in romance scams... because scammers take the time to assure somebody that they're in a legitimate relationship before they ask for money," Cocker said.
As online, there's no alert or flag warning people what's real and what's not, here are three things Kiwis can do to protect their money.
1. Stop and check details first
As most scams are quickly flagged online, Netsafe CEO Martin Cocker suggests searching the company name, names of people involved and the type of investment first.
"Every time you're asked to make a payment, or provide personal information, the onus comes back to you to ensure that you're sharing it with the person you think you're sharing it with," Cocker said.
It requires "making that leap" where people stop and think to check 'advice', even if it's from someone they trust.
"Make it a habit - every time you're spending with somebody [or] starting something new [e.g. starting internet banking or using e-commerce for the first time], do that research, even if it seems ridiculous," Cocker added.
2. Be wary of unconventional investment 'opportunities'
As they operate outside of normal financial regimes and there's a lack of widespread knowledge, Netsafe says many scams this year involve investing in fake cryptocurrency platforms.
Along with a prospectus, scammers may give regular feedback and have a website showing how well the 'investment' is growing. Once people see it's going well, they're more likely to put more money in, which is where the big losses occur.
And some scammers have gone the extra mile to appear trustworthy.
"One thing we've seen is that scammers sometimes give back the first payment to build trust," Cocker said.
3. Protect personal information
Think twice before sharing personal details, such as passwords and other sensitive information online.
In dating conversations, questions around age are common. But it's typically "the next layer of questions" such as bank account details, or personal questions that may be used to reset passwords, where people may be at risk of being scammed, Netsafe says.
Losses from 'whaling' scams, a version of a 'phishing' scam where a scammer pretends to be a company owner or someone authorised to make payments, totaled $83,405.97, with a single loss of $66,905.
Reports of 'impersonation' scams, where a scammer pretends to be someone they know, are declining, Netsafe says. As almost all of these reports involve email or Facebook requests for gift cards, it's important to keep social media accounts, including passwords safe and to be aware of fake accounts using the same name.