Tuesday 19 November 2019
Scam avalanche turns tidal wave as BNZ sees 50% increase in victims
Bank of New Zealand (BNZ) is urging its customers and New Zealanders to stay vigilant and report scams to their banks as a tidal wave of criminal activity continues to hit New Zealand’s shores.
BNZ’s warning comes during International Fraud Week and it says in the last year it has seen a 54% increase in the number of victims to scammers. It has also seen gross fraud, net loss and customer loss all trend upwards.
Ashley Kai Fong, BNZ Head of Financial Crime, says, “In my ten years in banking, I’ve never seen this level of scam activity before. It is getting worse each year.
“Scammers are working every possible angle to steal your money. We catch a lot of it, but some is going unreported which means we are unable to help,” he says.
Kai Fong says greater awareness of scamming and reporting fraud and scams to banks or the police as soon as people are aware of criminal activity is vital.
“We’re continually investing in new technology to catch these criminals and having great success, but there are thousands of scammers around the world finding new ways to scam people out of money. We need the public to be vigilant and report scams to us as soon as possible so we can act quickly and recover lost money.
“Speed is of the essence. If someone reports a scam to us within 24 hours we can typically recover their funds, but any longer and the process becomes difficult and we cannot always get everything back,” he says.
Relationship scams still in the top 5
Kai Fong says although the “relationship scam” is less prevalent than it once was, it is often the most heartbreaking.
He says, “In one case this year a customer believed her online “partner” was a soldier in a peacekeeping group in the Middle East and needed funds in excess of $50,000 to cover taxes for jewellery and airfares.
“We spoke to her and convinced her this was a scam and no funds were sent overseas, but some of these scams do get through because the scammers sew mistrust in their victims and convince them not to talk to their family, friends or their banks.”
Kai Fong says BNZ has been very successful in stopping relationship scams by recognising irregular transactions and its staff noticing a change in customer behavior.
Kai Fong says that often victims of relationship scams are used as “money mules” where they unwittingly receive stolen funds into their bank accounts and are then instructed by their “partners” to send money overseas. The funds are often from scam victims.
“The victims we typically see have been heavily socially engineered, often over several years, and trust their so-called partners implicitly. Many of these scams go unreported because of a sense of shame and embarrassment that a victims’ families and friends will find out,” says Kai Fong.
Number one scam
The Spark Scam, where scammers call people posing as Tech Support and convince them they need access to their computers to fix issues such as viruses, is the most prevalent scam by volume and accounted for the majority of funds customers lost to scams.
Kai Fong says, “These guys are relentless. They are calling people several times a day and sometimes, simply by wearing their victims down, are managing to get access to people’s computers or passwords and stealing money.”
Kai Fong says BNZ’s systems have been successful in shutting down many of these payments, but it is only a matter of time till the scammers try another way to ply their trade under the radar.
“We want New Zealanders to know that their bank or any legitimate organisation will never contact you out of the blue and ask for your password or access to your computer. Just hang up,” he says.
Warning for small businesses
While the Spark Scam may have been the most prevalent, Invoice Scamming was proving to be the most lucrative with less instances of scams netting a higher dollar amount.
In these scams, the scammers gain access to a business’ email account and advise customers of a change in bank account details. Because it comes from the business’ email account and tends to be for expected payments, the scammers are often successful in having funds transferred to their accounts. Once the change is discovered, the money has often been transferred overseas and is hard to recover.
Kai Fong says, “Invoicing scams are successful in getting tens of thousands, sometimes hundreds of thousands, of dollars off New Zealand businesses. Most businesses are quick to report these scams and we do manage to recover most of the funds.
“The best prevention for invoice scams is to strengthen you email security, verbally confirm any change in a bank account and implement processes for managing payments over a certain amount such as needing two people in a business to review an invoice,” he says.
Get Scam Scavvy
This year BNZ launched Scam Savvy, online tools to help people recognise and avoid scams.
Kai Fong says, “You can test yourself against mock scams and practice how to identify the real thing. We know this makes a difference and we’ve had great feedback across the country.”
Test yourself at www.getscamsavvy.co.nz
Kai Fong also urged New Zealanders to report scams rather than stay silent when they fall victim to scammers.
“We want New Zealanders armed with the tools they need to avoid being scammed so the internet feels like a safe space and we encourage Kiwis to speak-up if they fall victim to scam,” he says.