$8.9 million lost to scams in three months, the highest figure since records began

Tuesday, 6 December 2022

People who were told they'd be paid for using a social media site say it's just a scam.

An Auckland film-maker has joined the ranks of thousands of people who will lose money to scammers this holiday season.

The man tried to buy a PlayStation 5 on Trade Me, and after winning the auction was instructed to transfer $750 into a bank account number provided by Trade Me.

But six hours later Trade Me sent him a follow-up email that warned him not to complete the trade, as a scammer had hacked a legitimate seller’s account and changed the bank account number.

By then it was too late and he had transferred the money into the scammer’s account.

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“There was such a false sense of security,” he said. “This guy had a 100% positive rating, hundreds of comments of good feedback, his account was absolutely pristine. I have no idea what else I could have done.”

Trade Me said he should have followed its buyer protocol and transferred money through its in-house service, Ping.

The film-maker said the response left him feeling “brushed off”.

Trade Me and other businesses that held people’s bank account details should be doing far more to protect their users from scams, he said.

“It is about security, as soon as someone’s account is compromised you need some kind of 2-factor authentication that delays or locks an account when someone changes an email or a bank account number,” he said.

Cert NZ insights manager Nicte Lopez says societal stigma attached to being the victim of a scam is putting victims off reporting some instances.

Trade Me policy and compliance manager James Ryan said as the payment happened outside of Trade Me, the company had no way to recover the funds.

“It’s important to remember that 99.99% of trades go off without a hitch. Sadly, however, there are some devious people online who will try to steal or scam people out of their money,” Ryan said.

The Auckland film-maker is only one of thousands of people who have fallen victims to scams in the September quarter, during which $8.9 million was lost to online scams, the largest amount since records began 5 years ago.

Over 2000 incidents were reported to Cert NZ between July 1 and September 30.

Cert NZ insights manager Nicte Lopez said there had been a rising tide of scams around the world and New Zealand was no exception.

An increase in access to technology, and escalating sophistication in scam tactics was the cause for the large spike in money lost, she said.

But according to the New Zealand Police 2021 crime and victims survey, only 9% of fraud and cybercrime incidents were reported to police.

This meant the actual amount of money lost and the number of victims could be much higher, she said.

“There is a stigma in society to actually admitting you have been scammed. People think it is simple, and they should have known better. In actual fact it is incredibly easy to be caught in a scam,” Lopez said.

Cert NZ director Rob Pope said he hoped the amount of money lost would inspire people to be more secure online.

“People should also turn on two-factor authentication, as this is still the best way to stop baddies accessing your accounts. This includes social media accounts as well as banks,” Pope said.

But Pope warned the holiday season could bring in an even higher number of scams. Between October and December last year, scam levels doubled to almost 4000 reports, Cert data showed.

“As we come into the holiday season, New Zealanders will be looking online for bargains and scammers know it. We’re asking everyone to be cautious when they’re shopping online,” Pope said.

Microsoft New Zealand national technology officer Russell Craig said scammers often adjusted their tactics to holiday periods and associated sales.

“Scammers know we are all looking for those really good deals. Especially when for a lot of Kiwis times are economically tough, they’ll use that knowledge to try to trick us out of our money and data,” Craig said.

People could expect to see heightened levels of scammers impersonating well-known businesses offering special deals, or package deliveries over the Christmas period, he said.