Turn The Tables On Scammers And Fraudsters

Hon Heather Roy, Minister Of Consumer Affairs
Monday March 2 2009

Speech to the launch of Fraud Awareness Week; Trade Me, Level 3, NZX Centre, 11 Cable Street, Wellington; Monday, March 2 2009.

It's a pleasure to be here in my new capacity as Minister of Consumer Affairs to launch New Zealand's fourth Fraud Awareness campaign.

Firstly, I would like to thank you all for being here today. It's great to see the support from across the public, private and community sectors for this awareness campaign.

In truth, I'd much prefer to be standing here today telling you that you that we're beating the scammers; that scams have been eliminated, and that no-one will lose out to a scam again - but, sadly, that just simply isn't the case.

The fact is that New Zealand isn't immune to scams. From lottery and 'phishing' scams, to identity theft and romance scams - there seems to be a never ending stream of reports of fraudulent schemes perpetrated by deceitful individuals trying to dupe people into parting with their money.

One such scheme that has become quite common lately is the holiday voucher scam - a form of which was experienced by 'Danny' in Auckland not too long ago.

Danny reported to us that he was contacted by an Australian-based holiday company recently, which told him he had won some free holiday vouchers. All he had to do was give the company his credit card number so it could verify his identity.

Danny gave his number and thought no more of it - only to log on to his internet banking a day or so later to discover that his credit card had been debited $305 without his approval to this so-called 'travel company'.

When he phoned the company on the 0800 number he had been given, al he got was a disconnected tone. He then emailed and, eventually, the 'company' replied to say he would receive a refund. That was almost a month ago; he's still waiting and his bank is now investigating.

This is just one example of the plethora of fraudulent schemes being run on unsuspecting New Zealanders throughout the country - more than 20,000 of whom are defrauded of around $2,500 each year; a loss to the national economy of around $487 million per annum.

But we can fight back - and the best way to do this is to help people recognise a scam so they can avoid falling victim in the first place. A scam can be defined as:

"a misleading or deceptive business practice where you receive an unsolicited or uninvited contact - by email, letter, phone or text - and false promises are made to con you out of money."

That's the focus of Fraud Awareness Week - raising awareness and educating the public about scams in our community.

The vast majority of the scams that are experienced here in New Zealand originate offshore. This makes them near impossible to track and investigate - and, once sent overseas, money scammers obtain through scams is virtually impossible to recover.

Another problem we face is the pervading attitude that scams only happen to others - while most people are generally aware that scams occur, few actually believe that they will be the target. Most people just don't think it will ever happen to them - but it could.

Anyone can be the target of a scam, and we must all understand that scams come in many forms - door-to-door, through the post, via email, telephone and text messages, and over the internet.

Scams are designed to trick you into relinquishing either your money or your personal details. The people behind them are manipulative, and know exactly how to push your buttons to get the response they're after.

And they're becoming increasingly sophisticated. Gone are the days when scam emails and letters were riddled with spelling mistakes, grammatical errors and were easy to spot. Now, for example, 'phishing' emails appear authentic and people are easily fooled into thinking they have been genuinely sent from their bank.

The advice? Fight the scammers. Don't respond to them. By responding, you let the scammer know you're there. By ignoring them, you fool the scammer; you fool them into believing you don't even exist - meaning they can't take your money.

And losing money to a scammer is the last thing any of us want to do. With the current global financial situation, there couldn't be a worse time to lose out to a scam.

And it's not just happening here. Overseas evidence shows that the impact of scams on an economy is considerable - research by the Australian government showed that, in 2007 alone, one in 20 Australians lost a total of $1 billion as a result of personal fraud. When converted into New Zealand dollars, that's an average loss of around $2,700 per scam victim.

Farther afield, British research from the UK Office of Fair Trading in late 2006 estimated that 6.5 percent of the British population falls victim to scams every year - representing an estimated loss of £850, or $NZ2,400 - per victim.
Using the British and Australian experiences we have estimated that around 5.75 percent of New Zealand's population has been scammed in the past year, with an average loss of around $2,500 each - an approximate total loss of $487 million.

That's $2,500 that New Zealanders simply cannot afford to lose at any time, let alone in the current financial climate.
Here behind me is just a sample of what that $2,500 means to a Kiwi family - $2,500 worth of day-to-day grocery items kindly provided by Wellington's New World Chaffers.

We must work together to fight scams. This brings us back to the Fraud Awareness campaigns and ways of working together to fight the scammers in order to limit the loss to both consumers and the economy.

Fraud Awareness Week is run in New Zealand by my Ministry of Consumer Affairs and the Commerce Commission as part of the Australasian Consumer Fraud Taskforce - a group of 19 Australian and New Zealand government agencies.

The Taskforce works together to reduce the incidence and impact of frauds and scams and, each year, co-ordinates an information campaign for consumers timed to coincide with other global consumer fraud prevention activities.

Fraud Awareness Week 2009 aims to raise New Zealanders' awareness about how to spot, protect themselves from, and report scams via the Scamwatch website.

With Taskforce research showing that people respond best to stories of people like them, this year's campaign focuses on the personal experiences of four New Zealand scam victims. For privacy reasons, these people are portrayed on the Scamwatch website and in advertising materials models - actual employees of the Ministry of Consumer Affairs - but the stories and experiences are authentic.

I would like to thank these Ministry employees for donating their time free of charge to front the campaign and for telling the stories of these real life victims who, understandably, would prefer not to publicly admit that they have been scammed.

People can learn more of these stories on the Scamwatch website and in doing so, I hope, will be better prepared so as to not fall into the same traps.

Remember: while most people know of someone who has been scammed, or lost money to fraud, they still don't think it will happen to them - but anyone can be the target of a scam.

One of the other reasons for today's event is to thank our public, private and community agency partners who are all undertaking various initiatives to help in the promotion of both Fraud Awareness Week and the Scamwatch website.

So thank you to our private sector partners - who include many of the major New Zealand banks, the New Zealand Bankers Association, IAG, the Insurance Council of New Zealand, Symantec, Telecom, TelstraClear, Vodafone, Trade Me, Visa and Western Union.

And thank you also to our community agency partners - including Netsafe, the Citizens' Advice Bureau, the Community Law Centres, the Federation of Family Budgeting Services, the Maori Women's Welfare League, PACIFICA, the Asian Network, and Work and Income Offices. They are all carrying the posters and leaflets you'll see around you here today.

There has also been a lot of cross-Government co-ordination. As such, I wish to thank our public sector partners - including the Banking Ombudsman's office, the Department of Internal Affairs, the Ministry of Economic Development, the New Zealand Police, the Office of the Privacy Commissioner, the Securities Commission, and the Serious Fraud Office.

I would also like to thank New World Chaffers for kindly providing us with the grocery items you see here today to give us a real, true-to-life idea of just what fraudsters are taking away from our families with their scams.

And, of course, I thank my officials at the Ministry of Consumer Affairs and the staff of the Commerce Commission who organise the campaign.

By working together we can fight the scammers. It's great to see - not only so many public sector agencies working together but also - the building of relationships with private and community sector agencies, all for the common goal of raising awareness about scams.

I will leave you with one resounding message: anyone can be the target of a scam. Remember, scams target you, so protect yourself.

Thank you for support today. This is a serious issue, and one that needs to be highlighted. It is a pleasure to officially launch Fraud Awareness Week 2009.

ENDS

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