Consumer NZ warns scam victims to watch out for recovery scams

Consumer NZ warns victims to watch out for recovery scams. Photo / NZME

If you’ve been scammed in the past, watch out for recovery scams, warns Consumer.

“A recovery scam is when a scammer contacts a known victim and masquerades as someone trying to recover the lost funds,” said Ruairi O’Shea, investigative writer at Consumer.

The number of victims for recovery scammers to target is large and increasing.

Consumer’s research has found 1 in 10 households lost money to a scammer in the past year, while the Banking Ombudsman’s latest annual report points to a surge in reported scam activity and a record number of scam cases. Compared to its 22–23 report, scam cases are up 27%, with victims losing on average $80,000, up from $57,000 the previous year.

“If a scammer has details about a previous scam, it can be used to foster trust and capitalise on a victim’s fear – which means they’re more likely to share personal details that put them at further risk of being exploited again.

“Victims of recovery scams are being kicked when they’re at their most vulnerable. We need to consider the long-term impacts of this – what does it do to someone’s ability to trust again and navigate day-to-day life with confidence?” O’Shea said.

How are repeat victims identified

“If a scammer steals from you, they can use the knowledge gained from that scam – your name, who you bank with, how much was stolen and when – and call you pretending to be your bank and repeat that information back to you. It gives them ammo to trick you again.”

Scammers also go hunting for victims online.

“It’s not fair, but if you’ve been a scam victim before, it can lead to you being targeted again, either by the same scammers via a recovery scam, or by your personal information – and the fact that you’re vulnerable – being passed around by malicious people online. This is why we see so many repeat victims of scams,” said O’Shea.

Although there’s no data on the number of recovery scam victims, the latest Crime and Victims Survey from the Ministry of Justice found 58,000 New Zealanders were repeat victims of fraud and cybercrime in 2023. That’s equivalent to almost 12% of all fraud and cybercrime victims.

Consumer recently spoke to a woman, Heather*, who was targeted by scammers three times in a year. The third scam attempt was a bank impersonation.

“Heather said the conversation with the scammer followed the exact script of conversations she had with her bank after a previous scam. That familiarity helped the scammer build trust.”

How to protect yourself

Consumer urges scam victims to be ultra vigilant, especially in the days and weeks immediately after a scam has taken place. The following tips can help to safeguard against all scams.

• Be suspicious of spontaneous contact.
• Always resist urgency.
• Find contact information independently.
• Consider changing your contact details if you have been scammed in the past.
• Protect your personal information including driving licence number, IRD number and other personal details.
• Do not give remote access to your device.

Consumer’s call to stamp out scams

Consumer is campaigning for a government-led response to stamp out scams in New Zealand.

Consumer wants the Government to introduce a national anti-scam framework which requires banks, telcos and digital platforms to act to stop scams, and setting out their liability if they don’t.

Three-quarters of New Zealanders agree and think social media and phone companies should be responsible for preventing scams.

Consumer would like to see scam victims reimbursed unless they have been grossly negligent.

If you want to add your voice to Consumer’s call, please sign the petition.

* Heather is a pseudonym to protect the victim’s identity.

- SunLive