Consumer Protection NZ provides tips on how to stay safe from scams. Video / Consumer Protection
A prominent Kiwi entertainer has lost $100,000 after being duped into investing money in an elaborate investment scam.
ANZ Bank was unable to recover the money after it was wired overseas. It has refused liability and declined to reimburse the man for his significant losses.
Unhappy with the bank’s stance,the entertainer has now engaged a private investigator and even written to ANZ board chairman Sir John Key in a bid to recover the money.
Police believe the criminals are based offshore, say they have no lines of inquiry and the case has been shelved. They are warning people to triple-check the legitimacy of investment opportunities before parting with their cash.
The entertainer is a celebrated musician who has won countless accolades over the course of his distinguished career.
He asked to remain anonymous to avoid a backlash given his public profile, but wanted to tell his story to warn others about the danger of being scammed.
“These guys need to be stopped completely because they are taking in so many New Zealanders.
“I really feel for [other victims] big time, because it’s not just that action [of being scammed], it’s the demeaning of a person’s life.”
Early last year the entertainer noticed an online advertisement purporting to be for AMP Capital Funds. After responding he received an investment offer for an AMP high-yield, global market fund promising a 4.94 per cent one-year return.
He spent several weeks seeking further documentation and making multiple telephone calls to people he believed were employees at AMP Wellington. One of the scammers used a name the entertainer confirmed belonged to a bona fide AMP staff member.
In February last year, the entertainer contacted ANZ to authorise a $100,000 payment. A member of the bank’s international team advised him to check the beneficiary was legitimate, and if he was unsure, not to proceed.
The entertainer sought further advice from a friend with experience in the banking industry. The money was to be paid into a company called Alpha Network PTY Limited, which according to the scammers was an escrow service for AMP.
After the friend advised the entertainer that escrow services were commonly used by larger corporations, he contacted ANZ again on March 1 to authorise the payment.
When questioned again if he was comfortable sending the large sum of money to the offshore beneficiary, the entertainer told ANZ: “My financial adviser tells me it’s a perfectly legitimate company.”
An international money transfer was then made from ANZ to St George Bank in Sydney.
The entertainer realised he’d been scammed 10 days later and immediately contacted ANZ and police.
The matter was referred to ANZ’s fraud team, who made several unsuccessful attempts to reverse the offshore money transfer and recover the lost funds.
The entertainer met with two ANZ executives in June, and asked the company to refund 50 per cent of his losses given its inability to stop the payment and his longstanding customer relationship with the bank.
However, in a letter dated June 23, a senior ANZ customer relations manager refused the request, given the lengths ANZ had gone to ensure the entertainer had done his due diligence.
The manager stressed that ANZ staff did not provide financial advice on “third party” investment products.
“Unfortunately, it turned out that the investment opportunity you’d responded to was part of an elaborate and sophisticated scam, and you’ve now lost the $100,000 you’d intended to invest with AMP Capital.
“We don’t agree with you that ANZ has any ‘culpability’ in your loss.
“We appreciate this isn’t the outcome you’ve been seeking; however, we believe ANZ has acted appropriately in the circumstances.”
ANZ did agree to refund its $28 international money transfer fee as a “gesture of goodwill”, and was working with police who were liaising with Interpol, the manager wrote.
The scammers convinced the entertainer to send $100,000 to an Australian bank account.
In a letter to John Key last month, specialist investigator William Merritt said he had been instructed to investigate the scam, “carried out by persons unknown posing as AMP executives”, and the roles of ANZ, AMP and St George Bank.
“I will be completing investigations into the standard of customer protection provided by all three organisations. Where weaknesses are identified these will be exposed, along with any deficiencies that may exist that would allow fraudulent scammers to profit.”
The letter said ANZ “must accept some responsibility” for not being able to stop the international money transfer, which allowed the fraudsters to “escape with the funds”.
The entertainer also believed the closure of his local ANZ branch had prevented him from seeking one-on-one financial advice from a trusted banking representative, making him more vulnerable to scammers.
The man told the Herald his health had suffered due to stress.
He was “not an absolute idiot”, but the investment advertisement appeared legitimate and he thought he’d made sufficient checks.
“They sucked me in beautifully. These guys are real crooks.”
He urged people to watch out for scammers, and for banks and authorities to step up work to protect Kiwis.
In a statement, ANZ said it sympathised with the entertainer and had been in regular contact with him.
Despite ANZ’s efforts to recall the money transfer, it had already been processed and the funds were unrecoverable.
Though the entertainer had asked for compensation, a bank’s primary duty was to act on its customer’s payment instructions, “unless there are obvious red flags”.
“Because there were no red flags, we haven’t agreed to [the entertainer’s] request.
“As much as we understand this has been very upsetting for [the entertainer], ANZ isn’t responsible for his loss.”
The case underlined the importance of customers alerting their bank immediately if they’d been scammed, given the speed and complex nature of online money transfers, and the need for caution when sending international payments.
An AMP spokeswoman said it became aware of the scam in January 2022 and put measures in place to warn people.
“Unfortunately, examples of scammers impersonating well-known brands is now an even more frequent occurrence and is a reminder that all members of the public need to stay vigilant.”
Auckland police financial crime unit Detective Senior Sergeant Craig Bolton said as the scammers were likely based overseas, they were outside New Zealand jurisdiction, “which poses a challenge for police unfortunately”.
