A new study suggests scams are becoming one of the most prevalent types of crime in New Zealand, with hundreds of thousands of Kiwis affected.
Researcher Jarrod Gilbert believes the Government and private companies are not moving quickly enough to address the issue, leaving us a “soft target”.
“Because the scammers are international, they don’t care where they get their money from,” he says.
“They will look for countries with weaknesses.”
The report was informed by the New Zealand Crime and Victims Survey, which shows 10.3% of Kiwis were affected by fraud or deception in the last year.
In all, there were 541,000 instances of fraud and deception in the most recent cycle of the survey, which is administered by the Ministry of Justice.
Fraud and deception generally had risen substantially over several years, driven by cyber fraud.
‘It felt totally legitimate’ — fraud victim
One of those affected was Auckland man Rodney Mathers, 78.
He lost $100,000 to a highly sophisticated insurance investment scam which impersonated the trans-Tasman company Suncorp.
Emails provided by Mathers – a former commercial insurance broker – show the scammer made extensive efforts to masquerade as the company, with little clues as to the real purpose.
That included a formal investment prospectus with a forged signature, a landline phone number, postal address and even confidentially warnings in emails.
“It felt totally legitimate,” Mathers said.
“They had copied Suncorp’s website, they’d copied the photo of the managing director, there was an endorsement from the managing director and a ‘thank you’ from the managing director.”
It was only two months later when no documentation arrived that Mathers realised it had all been an elaborate hoax, the email by now inactive and the phone line disconnected.
Victims rarely report, Govt needs to act — Gilbert
Gilbert believes the problem is so severe that the Government should create a new “scam centre” that brings state agencies and private companies together.
His study – which interviewed 40 experts and victims – detailed how scams often go unpunished, with only 11% of scam victimisations reported to police currently.
Those who did report often found process “confusing and overly complex”.
Some 60% of victimisations were reported to banks, but they “generally do not pass reports by customers on”.
Gilbert argued a scam centre would give victims one central place to go.
“As soon as the scam is identified by any tech company, by any bank, by any individual, it can be reported there and disseminated immediately,” he said.
“Why? Because everyone’s in the same room and it can be shut down.”
Multi-agency approach an ‘option’ — Minister
Minister of Commerce and Consumer Affairs Andrew Bayly described that as an “option” when approached today.
He said the Government recognised the scale of the issue and was working hard to address it.
“The banks will shortly be releasing their new Code of Conduct, which will deal substantially with the issue of that,” he said.
““[I’m] also working with the telcos. I fact, I met with the telecommunication forum this morning about their code, and we’re also working with online platform providers.”
Bayly added that he planned to take a position to Cabinet “in due course”, and was working to appoint a lead government agency.
Gilbert was complimentary of the Government’s efforts so far but said more should be done.
“We are taking steps, [but] we have not taken large enough or fast enough steps, so in that sense — behind best practice internationally — we are falling behind,” he said.
“We cannot afford to fall behind, we need to be ahead of this curve.”
That sentiment was echoed by Mathers, who has been told his scammer is in Australia or Vietnam.
Despite a long battle for redress, he has never recovered any of the money he lost.
“This is really costing average citizens huge amounts of money,” he said.
“It makes me feel like we’re living in a Third World country, we may as well be in North Korea or somewhere — because our systems are just failing.”