By Gareth Vaughan
Bronwyn Groot, fraud education manager at the Commission for Financial Capability (CFFC), has a stark message for you.
You will be targeted by fraudsters, or scammers.
Groot joined the CFFC last July after 20 years in banking, including several years working in BNZ’s fraud investigation and security department. And she is in no doubt that the volume of fraudsters is increasing and the sophistication of their schemes is improving.
"You will be targeted, there's no question about it. You will be targeted at some point in time. The big thing you need to do is stop and wait. Stop, wait and think, stop, wait and validate. Is this for real? And instead of thinking 'what could I win here' think what could I lose?' Make sure you talk to someone," Groot told interest.co.nz in a Double Shot interview.
"The scammers, or the fraudsters, will swear you to secrecy, confidentiality all that sort of stuff, but make sure you talk to someone whether it be a friend, a family member, the bank staff, anybody."
"The size of the problem is definitely growing. We don't have any figures that we can throw out there. There hasn't been any large scale research done on this to actually see how big the problem is. But I know, coming across my desk on a daily basis, that people are losing [are] losing hundreds of thousands, if not millions of dollars every day," says Groot.
"When I started this role seven years ago I used to go 'wow' when someone lost $25,000. Sadly now when someone tells me they've lost over $1 million I'm like 'ah gosh, another one'."
She says the volume of victims has increased "hugely" over the past seven years, and she's only seeing the tip of the iceberg.
"People don't report it because they're embarrassed, they're scared, they don't know where to go to report it, and maybe they just don't even know what to do."
"If you have lost money contact your bank straight away. Let them know exactly what happened. You can then go to other agencies, definitely go to the police. There can be no resources put in to help victims if we don't know how big the problem actually is," says Groot.
Much of the victims' money is going to organised crime, she adds.
"We know that a lot of the money is going to organised crime. They're running a really sophisticated business model. They reinvest the money back into their business to have sophisticated websites, sophisticated documents all to lure you into that trap of believing that it's real. The money's being used for drugs, for slavery, human trafficking, all of that sort of stuff. You've also got big fat cats who are spending your money lavishly on a lavish lifestyle," says Groot.
The CFFC has issued what it calls The Little Black Book of Scams, which is designed to help people prepare for and recognise fraud. It details 11 different types of fraud, plus a series of red flags - or things to watch for. One of the key red flags is cold calls given it's illegal to sell financial products in New Zealand off the back of a cold call.
Overseas investment scams are currently commonplace.
"They normally start with a cold call. You get a cold call out of the blue [from] someone who eventually becomes your friend and you decide 'ok I will invest in these shares'. They have a very legitimate looking website that's up, probably even have 24/7 chat available to answer any questions that you may have. The sad reality behind these overseas investment scams is that hundreds of thousands of dollars is going overseas and it's not able to be recouped," says Groot.
Romance scams are also common, Groot says, including via the online scrabble game called words with friends.
"You sign up and you can ask various people for help if you get stuck with words. And I am hearing more and more and more people that are falling into romance scams through words for friends. And they're using a lot of New Zealand based money mules," says Groot.
Her advice to victims is they're not alone.
"They need to realise that they are not alone. They are not going to be the only victim. It's also really difficult in New Zealand to know where to go. We don't have a one stop shop to go to to report scams. So you can either go to CERT, report it through them, you can go to Netsafe, report it through them, but definitely if you have lost money go to the Police," Groot says.
Meanwhile Groot wants people to stop talking of "scams" and instead use the word "fraud." She argues the word fraud removes the stigma associated with being scammed, and might encourage people to talk more openly about the methods used to target them, spread the word to prevent others becoming victims, and focus resources on stopping offenders.
"I think as soon as you hear the word 'scam' straight away you think 'how can they be so stupid, how can they be so gullible.' I hear it all the time. And I think we need to name it, what it actually is. It's not a scam, it's fraud. Someone has gone out of their way to take money from you," says Groot.
"We're constantly blaming the victims. Instead we should be blaming the offenders. They're the ones who are taking the money. Anyone can fall victim to a fraud at any time, you don't have to be silly. It's just the perfect fraud at the perfect time by a highly skilled offender."
It's not just the elderly being conned. Groot is aware of a 21 year-old victim and says a lot of younger people are being targeted by employment scams, make some money quick type frauds.
"Any age group is coming across our desk."
Given many of the fraudsters are operating across international borders, Groot says cross border cooperation from authorities is required to tackle them.
"I believe we can be doing more. Let's share where the money went. Follow the money trail and share that information."
Groot talks of the bank account linked to an overseas investment scam she saw three years ago still being in use in Hong Kong.
"No one has shut it down. There's that sort of information that needs to be shared," says Groot.
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