Gangland expert Jarrod Gilbert has turned his attention from “real world” crime to cyber scams — where he already knew there had been a surge in offending, but the profile of the victims surprised him.
“Contrary to expectations, scams in New Zealand affect people of all demographics, and are not disproportionately clustered among the elderly,” the Canterbury University academic says.
“Those who earn over $100,000 are significantly more likely to be victimised than those who do not, however.”
Unlike most other crimes, scam victimisation is weighted toward those with more money.
Those earning more than six figures were most likely to suffer scams at 16%, those earning $70,001—$100,000 a year at 11%, and those earning less than $70,000 a year at 9%.
Gilbert teamed up with researcher Ben Elley to write the report titled; The crime of the future that’s here today - a report on scams and what New Zealand needs to do.
It draws on data from the Ministry of Justice’s annual NZ Crime and Victims Survey (NZCVS).
“Not only are people with a personal income over $100,000 the most likely to suffer scams, rates of victimisation among that group have risen more than any other group since the first cycle of the NZCVS [in 2018], leaping from 6% to 16%.
“This may suggest an increase in fraudsters’ ability to construct scams that target those with money to invest, such as investment and cryptocurrency frauds.
“Scams defy other expectations around victims of crime as well. European New Zealanders are the ethnic group most likely to suffer scams, with 11% of Europeans reporting an experience of scams within the last 12 months.
“Asian people were the next highest at 10%, and Māori and Pacific Peoples, who in other categories of crime are often the most victimised, were the lowest at 9% and 8% respectively.
“Victimisations of Asian people have also risen precipitously, from 2% in 2018 to 8% in 2024. One Chinese victim that we spoke to reported a feeling that people of their ethnicity were being specifically targeted by certain types of scams because the community’s lower rates of English fluency, and greater vulnerability to scams that leverage anxieties about immigration.”
Overall, the number of fraud victims nearly doubled from 5.3% of the adult population in the first NZCVS survey in 2018 to 10.3% in 2023. Gilbert says most of the offending was online, driven by new technologies that made cyber scams easier to execute, plus the rise of remote work — which opened security holes for hackers to exploit during the pandemic and beyond.
The rise of new technologies will likely increase offending rates further, Gilbert says — but he adds that AI could also form part of the solution.
With many victims sheepish about being scammed, or confused about where to report a scam or dubious anything will be done, only 11% of scams are reported.
Another thing that struck Gilbert was that so much offending was causing so little stir from the Government, or in the popular imagination, given the scale of the offending (which runs to tens of millions a year according to reports to Cert NZ, $194.3m according to reports to Payments NZ — collectively owned by the major banks, $397m extrapolated from the NZCVS survey’s representative sample or $2.3 billion extrapolated from a Netsafe sample).
“When ram raids were taking up all the headlines, we saw a flurry of activity to counter them,” Gilbert said.
“But here’s an issue that I would argue is far more significant and yet we just don’t have the same urgency. It doesn’t have, for want of a better term, the sexiness around it.”
Some scam victims are losing hundreds of thousands or their life savings to scams, Gilbert says.
“But even the average amount lost — $734 according to the NZCVS survey — can have a significant financial impact for many people.”
Yet “No Government agency is fully responsible for combating scams, and fraud offending has been found to be treated essentially as an afterthought by police,” the report says.
Gilbert told the Herald: “There’s no wrong door to report it. Well, that means there’s no right door, either.”
He says when his survey began in early 2024, “scams were not identified as a priority for the Government”.
That changed when Commerce and Consumer Affairs Minister Andrew Bayly was made the lead minister for combatting scams late last year.
In a series of open letters, Bayly encouraged banks to accelerate work already under way on a confirmation-of-payee system, seen by many experts as a key protection against scams (and by Consumer as one that was long overdue). A rollout began in November and is due to be finished by Easter.
Bayly is also working with the banks on a voluntary reimbursement code for scam victims (the Herald understands news on a draft is just days away. Bayly has previously said he will consider a mandatory code if the proposal for a voluntary code falls short, or is too slow to emerge).
“Bayly has been firm, but he needs to continue to be firm,” Gilbert says.
“Because it’s not just about what needs to be done but the pace that it’s done. If we fall behind, New Zealand will be seen as a soft target and we’ll create new victims.”
There has been debate around the merits of a compulsory reimbursement code, as was recently introduced in the UK, with one school of thought being it will make people too blasé about security if they know there’s a 100% chance their bank will cover all their losses.
Gilbert’s take: “When it’s been done internationally, all of a sudden the banks put their skates on. All of a sudden, there’s a real urgency to taking action.”
Bayly also called bank, telco, social media firms and the heads of various Government agencies to a December pow-wow to discuss moves to coordinate a more centralised response to scams, and more information sharing. There was no immediate update today.
There is already a model across the Tasman where, in its 2023 Budget, the Australian Government allocated A$53 million ($58m) to fund the setting up of the National Anti-Scam Centre over the next two years.
“It has to be all under the same roof,” Gilbert says. And that’s no metaphor.
The Australians had already adopted a cybersecurity model that saw reps from various agencies working together in the same building.
“I’m convinced that’s absolutely essential,” Gilbert said. “Anyone who has worked in Government knows that silos develop.”
In Australia, legislation was passed in November last year that allows for an Anti-Scam Code, with the ACC (Australia’s equivalent to our Commerce Commission) given new powers to enforce scam-prevention codes on specific industries, such as banking or social media, complete with fines of up to A$50m for non-compliance.
Gilbert sees scope for leaning harder on organisations operating in New Zealand. He gives the banks credit for taking steps, if not at the pace he’d like. But his report says: “Tech companies — and in particular, social media — are widely neglecting their responsibilities in terms of scam prevention.”
Across the Tasman, where it faces an A$50m fine, Meta in December introduced an anti-scam measure — requiring financial service advertisers to verify key details. The protection did not extend to New Zealand.
Bayly wanted to see an anti-scam code for this country, too, by the middle of this year. He has not committed to big fines but said he had discussed them with his opposite number in Australia.
Gilbert said New Zealand needs to be more on the front foot with online scams. “This is the crime of the future. If we take no action now, it will be dire.”
“I’d like to thank Jared Gilbert for his report, and shining the light on an issue that is so important and prevalent to us all,” Bayly told the Herald.
“Scams are the third largest economy in the world. The Government is very actively pursuing solutions and protections for consumers, as well as support for victims of scams.
“The government has a few current lines of work. First of all, banks will shortly be releasing their new code of conduct, which will deal substantially with their issue at play, we are also working with the telcos and I wrote to them in December to address my concerns in the space.
“The Government is moving at pace to implement protections in the space, but progress is difficult as it is such a broad and wide-ranging issue, and crosses over many sectors and international jurisdictions.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
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