Scamwatch reports bring total losses reported to $4.4m

FOR IMMEDIATE RELEASE

Scamwatch reports bring total losses reported to NetSafe's Orb website to $4.4m in third year of operation

Auckland, 12 August 2013

NetSafe today published its third annual review of cyber incidents reported by New Zealand internet users and has found that more than $4.4m has been lost over the last 12 months to internet scams.

Financial losses more than quadrupled year on year with 562 reports received where money was paid over to a scammer that was not recovered.

Reports made to the Consumer Affairs Scamwatch service are now handled by NetSafe's Online Reporting Button website (The Orb, www.theorb.org.nz) and this government initiative to combine resources means that cyber incident volumes have risen by 214% year on year from 1549 to 3317 during the third year of operation.

The Orb website is run in partnership with the Police, Customs Service, Commerce Commission, Department of Internal Affairs, Consumer Affairs (part of the Ministry of Business, Innovation and Employment), the National Cyber Security Centre and the Office of the Privacy Commissioner.

More reports and more losses suffered

“We've seen a significant rise in report volumes and the impact of large scale losses this year,” said Martin Cocker, NetSafe's CEO. “Some of that can be attributed to the new working relationship we have as a member of the cross agency Consumer Fraud Working Group*, but we believe New Zealanders are also facing increasingly well organised and resourceful cyber criminals who target internet users.”

In the last 12 months alone, seven Kiwis reported losses of more than $100,000, with the average Orb cyber incident more than doubling to $7,854.

Numbers published by Statistics New Zealand earlier this year showed that whilst more and more households are enjoying the benefits of going online, the number of people confirming that they'd been a victim of internet fraud had doubled since 2009**.

“We continue to see a wide range of scams and frauds targeting Kiwis”, said Cocker, “and many of these are well known phishing scams or spam emails which have been arriving in inboxes for over a decade.”

“Over the last 12 months, almost $1.3m was reported lost to dating and romance fraud – this category of scam has previously shown the largest losses recorded over the last two years***.”

“This year however, we've seen upfront payment or advanced fee fraud take the top spot with more than $1.5m lost to inheritance and government grant type scams where the victim is persuaded to part with their own money before they can receive their windfall.”

“Our advice to internet users remains simple: be suspicious of any unexpected emails that suggest you have won a large prize or that seek your help in transferring funds overseas. We strongly encourage people not to send money by wire transfer in this situation unless they know the other party personally. Once sent, it's impossible to track or recover your funds.”

Bad sellers and blackmail over Skype

Investment scam losses, where New Zealanders are tricked into putting their savings into overseas companies promising high returns, totalled more than $370,000.

The largest number of reports though came under the online trading category - more than 350 people reported losing money when purchasing goods online.

“Lots of buyers have suffered at the hands of scammers operating on popular buy and sell pages established on the Facebook platform,” said Cocker. “Individuals can easily create a profile on a local Facebook group, list items for sale and give a buyer their bank details. We've had many people report losing money when the cheap iPhone or clothes they've sent payment for has failed to arrive and the seller has disappeared, blocked them from the page or ignored all messages.”

Some online shoppers have also suffered when buying goods from little known ecommerce websites where companies have taken money and not delivered. This includes sites operating with a .co.nz domain name which are actually run from overseas. It pays to spend a few minutes researching any company you are thinking of buying from to see what other customers are saying.

A new scam that has been reported for the first time this year puts a technological spin on blackmail. Some internet users have reported taking part in naked video chat sessions only to find their activities have been recorded. The other party then threatens to upload the footage to YouTube or share it on social networking sites unless money is paid.

NetSafe received reports of up to $600 being sent to blackmailers believed to be located as far afield as the Philippines and Morocco. “It’s a very difficult situation to find yourself in – we’ve had users afraid of friends and family seeing the videos or losing their jobs. Once an initial sum has been sent through, the requests for more money keep coming,” said Martin Cocker.

Ransomware and hacked websites

Ransomware – where a security hole in your computer allows a cyber criminal to lock you out of your machine and demand payment – has been a common scourge for both home and small business internet users this year. A fake warning from ‘New Zealand Police’ that you have downloaded copyrighted material or been looking at child pornography is designed to scare you into paying a $100 ‘fine’.

Hacked websites and compromised email accounts were also high on the list of reports - NetSafe has free advice on common threats targeting both consumers and businesses on the Security Central website. Visit www.securitycentral.org.nz and learn about the NZ Phishing Species at www.securitycentral.org.nz/phishing.

Report to the Orb and help others

NetSafe remains keen for people affected by a wide range of online incidents to report their experiences via the Orb website so the information can be used to improve cyber safety and security programmes.

“Every Orb report that involves a loss can have a serious impact on family finances,” said Cocker, “We focused our cyber security education programme this year on phishing and social engineering to try and warn all New Zealanders about the damage cybercrime can cause.”

“We know it can be difficult to report falling victim to any of these scams, but it means the Orb partners can work together on reducing the harm caused.”

Help and advice from NetSafe

You can report your concerns about online incidents in one central location at www.theorb.org.nz. NetSafe will direct your report through to the partner best able to investigate or advise you. For preventative computer security advice visit www.securitycentral.org.nz.

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ENDS

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