Nearly $200 million was lost to scams during the year to September, according to figures collated by the Ministry of Business, Innovation and Employment (MBIE) as part of the launch of Fraud Awareness Week 2023.
The figures were supplied by ANZ, ASB, BNZ, The Co-operative Bank, Heartland Bank, Kiwibank, Rabobank, SBS Bank, TSB, credit union Unity and Westpac and gave a total loss of $198,372,837.17. That's an annual increase of just over 8%.
MBIE says the figure is a collective gross fraud figure. That means it's the figure lost to fraud and scams before any recoveries or reimbursements. It says a figure for the number of customers who were victims wasn't collated.
Figures produced at the same time last year showed customers lost $183.5 million to scams between October 2021 and September 2022 – and that was a 40% increase from the previous year.
Earlier this year the Banking Ombudsman reported almost a third of its annual investigations related to scams, in which victims' average losses were $57,000. The Banking Ombudsman Scheme’s annual report shows customer complaints about scams rose 43% on the previous year, making up 625 of the 3,513 complaints received in 2022-23. Phishing and investment scams predominated.
'If it seems too good to be true, then it probably is'
MBIE’s spokesperson for Fraud Awareness Week, Ian Caplin, says scammers are targeting everyone across New Zealand, but especially those with savings or investments who are looking to earn a little bit more from their money.
"It’s important to remember real investments don’t just come out of the blue," he said.
"If it seems too good to be true, then it probably is. If you receive unsolicited investment offers via email or through a ‘cold call’, ignore it. It’s illegal to sell financial products through these methods in New Zealand."
Caplin said the focus has been on scam prevention and raising awareness.
"Fraud is a crime. No [loss] figure is acceptable. However, the ever-changing nature of scams makes it difficult to anticipate how scammers will try targeting New Zealanders. A scam can evolve very quickly, and millions can be lost to international accounts in the space of a few months. The focus in New Zealand to date has been on scam prevention and raising awareness so New Zealanders can spot the signs and avoid them in the first place. Banks, digital platforms and telecommunication companies also play a critical role in detecting and preventing fraud before it happens," said Caplin.
Fraud Awareness Week is being run by MBIE in its role as chair of the Inter-agency Fraud Awareness Group. It is running from November 12 to November 18.
The Interagency Fraud Working Group includes members such as MBIE, CERT NZ, Netsafe NZ, the Serious Fraud Office, Te Ara Ahunga Ora – Retirement Commission, the Financial Markets Authority (FMA), Department of Internal Affairs, the Police, the Banking Ombudsman Scheme, the New Zealand Telecommunications Forum and representatives from the banking industry. Members work on operational and system enhancements to better protect consumers from scams.
MBIE says this year’s Fraud Awareness week efforts are focused on encouraging consumers not to fall victim to investment scams.
A joint social media campaign featuring the psychologist Nigel Latta has been created by MBIE and the Banking Ombudsman Scheme. This builds on the programme ‘You’ve been Scammed by Nigel Latta’, which broadcast on TVNZ earlier this year and is available on TVNZ on Demand.
The FMA has also created a social media campaign, in partnership with comedian Tom Sainsbury, illustrating what investment scams can look like.
Caplin stressed that in terms of their own protection, investors can contact institutions directly through contact details on official websites to verify documents and payment instructions before sending any money. The FMA website also contains details of warnings and real-life examples of scams.
"If you think you’ve been scammed, stop all contact with the scammer. Do not make any more payments and contact your bank immediately. Report all investment scams to the FMA, and scams in general to CERT NZ to stop others falling victim," said Caplin.
"If you don’t understand it, walk away. Before you make any investment, understand how the investment works."