Agencies across the country are fighting back in a bid to stop money scammed off innocent Kiwis being funnelled into illegal activities abroad. Chelsea Boyle reports.

New Zealanders are affected by scams every day and estimates show the cost of cybercrime to this country could be $400 million to $500 million every year.

Agencies such as Netsafe, police, the Financial Markets Authority and cyber security watchdog CERT NZ make up a multi-agency group dedicated to scam and fraud prevention - ever vigilant to the changing tactics used by foreign criminal syndicates.

driven by organised crime groups and overseas cartels.


The experts liaise with international money security agencies in a bid to block accounts and track down the scammers.

Together with the banking sector, the group are employing new technology in the fight. This includes tracking overseas money transfers and blocking suspect accounts.

It also includes anti-scam phone technology that blocks scam calls and records via computer software where they originated so authorities can track the racketeers who are trying to fleece unsuspecting Kiwis.

Education is another important tool, teaching people what to look out for and what to do if they realise they've been scammed.

Sometimes scammers don't get their own way, such as when a fake Malaysian travel company tried to trick savvy and curious pensioner Noeleen Sutton into passing on her personal information.

Sutton, 80, was curious after receiving an envelope in the mail covered in five "large, pretty Malaysian stamps" stuffed with a travel brochure and two scratchy cards.

Noeleen Sutton talked to Netsafe after a scammer told her she'd won US$200,000. Photo / Michael Craig
Noeleen Sutton talked to Netsafe after a scammer told her she'd won US$200,000. Photo / Michael Craig

One of the scratchies said she'd won USD$200,000 - all she had to do was contact the travel company who sent the package and send them her passport or driver's licence information.

Part of her knew it was too good to be true, but another curious part of her wanted to see whether she might be able to claim the prize.

"All common sense went out the window," Sutton said.

She ended up talking to Netsafe, and pulling out before the scam cost her anything.

"I had a lucky escape."

Commission for Financial Capability (CFFC) manager fraud education Bronwyn Groot advocates for scam victims.

In one case she called "absolutely devastating", a Kiwi family lost more than $2 million in what was then called binary options and is now referred to as cryptocurrency.

Last year, the recently retired parents of a man in his early 30s agreed to loan him money so he could trade in an online market which transpired to be fake.

Groot said cryptocurrency trading functioned similarly to online gambling - victims were sucked in by the thrill of "winning" trades, the earnings which would always eventually be lost by scammers secretly pulling the strings.

The initial investment was only USD$250, but once the first trade went awry the victim would be asked to invest more money, with the promise they'd be guided by the company to make even bigger gains.

And so on it goes, until victims have lost hundreds of thousands or even millions of dollars.

In the case Groot worked on, which unfolded last year over six months, the fallout ripped the family apart.

There was no way the couple's son could ever pay them back the money they'd lent him.

'It's just been horrendous," Groot said.

"It was a huge majority of their money. They will struggle and the family will struggle to come to terms with it."

In another case, a man in his 70s lost $175,000 in one weekend by trading on a cryptocurrency site.

"He struggles to accept that - the money was to support his wife."

Financial Capability (CFFC) manager fraud education Bronwyn Groot is fighting back against scammers. Photo / supplied
Financial Capability (CFFC) manager fraud education Bronwyn Groot is fighting back against scammers. Photo / supplied

Meanwhile, Groot took another case involving a couple in Nelson who were being plagued by robocalls.

"The couple in their 80s were getting absolutely hounded."

The calls were coming in thick and fast at all hours of the night - it was so bad it looked like they might have to change numbers.

The couple trialled a True Call unit to screen calls for them and the fraudulent calls stopped.

Groot intends on trialling 25 of the devices to help other would-be scam victims.

Auckland researcher Chris Hails is aiming to survey 1000 New Zealand internet users this year, using psychometric profiling to prevent Kiwis falling victim to cybercrime.

He has received funding from InternetNZ for the venture.

"That initial data suggested that 3-4 per cent of people may be more vulnerable to social engineering attacks based on facets of their personality," Hails said.

"Speaking with hundreds of victims made me realise there's a real need to identify high-risk human behaviours and mitigate it through additional security controls or by educating people in a targeted manner."

Netsafe chief executive Martin Cocker said when people were scammed in New Zealand, more often than not the money was sent overseas, which could make it hard to get back.

"[It] just ups and leaves the country and goes into the hands of criminals somewhere else."

Netsafe chief executive Martin Cocker.
Netsafe chief executive Martin Cocker.

More than $10 million in losses was reported to Netsafe each year, but already this year that number had been surpassed.

What was reported to Netsafe was a fraction of what was happening, Cocker said.

"It is a big number any way you look at it."

There were a variety of ways the impact of scams could be reduced and most of that came from technological developments.

However those tended to come more at the prevention end than the enforcement end.

People needed to appreciate scamming was a numbers game using low cost techniques of communicating with people such voice over IP, telephone or email, Cocker said.

"People have to be aware they are going to face scammers on a reasonably regular basis."

He urged people to be constantly vigilant.

"I think our laws are sufficient and the kind of offences scammers are committing we are well covered for in New Zealand."

However, by and large scammers who targeted Kiwi residents were operating from overseas countries where law enforcement was unable or unwilling to take action, he said.

"[New Zealand] would be a tremendously stupid place to operate those scams from because our law enforcement would be capable of taking action and you would face serious prosecution here."

Agencies dealing with different parts of scams meant the approach to fighting them here was piecemeal.

It was time for agencies to develop a more coordinated plan for disrupting and preventing scams, Cocker said.

"We do have agencies who are doing great jobs and Netsafe plays a small part in fighting scams, but it would be good if we said, 'okay this has gotten to the point where it's a big enough problem that we have got to dedicate some resource to it'.

"There is definitely going to need to be some heavy-duty rethinking of how it is that we stop scams that are effective."

Despite the work of Netsafe and other agencies, huge and sometimes devastating losses were still occurring.

Cocker said solutions were likely to come from the tech industry.

"They will come up with something that becomes really problematic to scammers, something that's difficult to bypass."

He said people would be surprised to know how much effort banks put into disrupting scams.

Banks had a big interest in countering scams because the financial losses harmed their customers and the banks themselves.

"I don't think we need to growl at the banks – I think the banks will come along for the ride for sure."

New Zealand Bankers' Association deputy chief executive Antony Buick-Constable said financial criminals were always looking for new ways to scam people.

Banks monitored fraud trends in an effort to stay ahead of them.

"For example, they can detect unusual spending patterns and prevent attempts by fraudsters to access accounts."

While banks took customer privacy very seriously they were permitted under the Privacy Act to respond to requests for information from the police in relation to criminal investigations in certain cases, he said.

"They are also required to report certain transactions to the police under the Anti-Money Laundering and Countering Financing of Terrorism Act."

In the Code of Banking Practice banks promised to keep their systems secure.

"Because of the convenience of banking today, with 24/7 online and mobile access, customers also have an important part to play in keeping their banking secure.

"Your bank will reimburse any losses for unauthorised electronic banking or card fraud if you took reasonable steps to protect your banking, and complied with your terms and conditions.

"When it comes to investments, it's always a good idea to consider getting advice."

The customer needed to be aware of the risks involved and any associated costs, and in some cases seek professional advice, he said.

"If you're thinking of investing in a company or venture you don't know, it really pays to check them out first."

Detective Superintendent Iain Chapman, the national manager of the New Zealand Police Financial Crime Group.
Detective Superintendent Iain Chapman, the national manager of the New Zealand Police Financial Crime Group.

Detective Superintendent Iain Chapman, the New Zealand Police Financial Crime Group national manager, said people were becoming increasingly comfortable with exchanging money and goods online through sellers such as Amazon and Trade Me through to Facebook buy and swap groups.

"It's becoming a really common place to do business."

It could be difficult for police to recover the money, Chapman said.

"The sad fact is that 90 per cent I'd say, anecdotally, of scammers are based overseas and not only are they based overseas but they are based in jurisdictions that don't like playing nice with other jurisdictions.

"It's going to come as no surprise, that we still see coming up time and time again countries like Nigeria, like Malaysia, like China as being a source of a numbers of these scam syndicates."

It might seem that a scammer on first look was based in a country such as Australia or even New Zealand but more than likely that is a third party, he said.

"It becomes very, very difficult for us to be able to chase that money to a point that we can recover it."

Arresting people outside New Zealand was incredibly difficult for police to do.

Scammers hid behind layers of legitimacy and could appear trustworthy, Chapman said.

"They do this as a business and they are actually really, really – unfortunately – good at what they do, but hiding behind these layers they create degrees of complication."

The moment someone realised they had suffered a loss relating to scam they should contact the organisation that facilitated that payment - it could be a bank, it could be a remitting company, it could be a third party remitter.

The goal was to get the money back before it was converted into cash, at which point it was likely lost forever.

"The banks through their networks both nationally and internationally have a far greater chance of pushing the button and freezing that money as it is still in transit."


• Don't give out too much personal information online, whether on social media or by email.
• Put privacy settings on your social media accounts and don't add too many personal details to your profile.
• If a friend asks you for money on social media, call or email them to confirm their request is legitimate.
• Turn on multifactor authentication for your online accounts.
• Choose unique passwords for your online accounts — don't use the same password for every account you have.
• Don't click on web links sent by someone you don't know, or that seem out of character for someone you do know.
• Don't pay invoices for any goods or services that you didn't ask for or receive. Be wary if a company you often deal with changes their account payment details unexpectedly.
• Always check your bank statements.
• Get a regular credit report to check that no accounts have been opened in your name without your knowledge.
• Try to remember that if something seems to be too good to be true, it probably is.

- Source:


• Netsafe on 0508 638723
• CERT NZ on 0800 2378 69
• Victim Support on 0800 842 846
• The Financial Markets Authority on 0800 434 566

- Additional reporting Tess Nichol and Carla Penman