Police response to scams and fraud 'woefully deficient' – IPCA

Tuesday, 15 November 2022

Cybercrime is the second least-reported crime, after sexual assault, according to the Crime and Victims Survey.

The police response to scams and fraud is undermining confidence not only in the police but also the broader criminal justice system, a new report has found.

The Independent Police Conduct Authority (IPCA) examined 52 complaints about police's handling of fraud from 2018 to 2020.

The report gives real examples of the police’s failures in investigating fraud, with scams involving Facebook Marketplace, kit-set homes, Trade Me and campervans.

The response to fraud was “woefully deficient”, IPCA chairperson Judge Colin Doherty wrote in the report. The stumbling block for police is an apparent unwillingness to investigate fraud offences that are not blatant and direct. Anything less clear is put in the “too hard” basket.

* Police social media campaign aims to crack down on online scamming

* Elderly victim conned out of $30,000 by scammer posing as bank employee

Facebook Marketplace is often used by scammers. (File photo)

* Investment scams targeting Chinese New Zealanders are under-reported

The problems stem from the police’s lack of understanding of fraud, the report says. Unless there was concrete evidence a fraudster intended to deceive the victims – such as a message admitting the transaction was a scam – police tended to disregard the claims or focus on a later offer to pay the victims back.

“The police response to fraud falls well short of victims’ expectations and is failing to meet the challenges that the present fraud landscape poses,” Judge Doherty wrote.

Around 8% of New Zealanders were victims of fraud in 2021. (File photo)

Police acknowledged the report and were looking at ways to improve the system, a spokesperson said. “We accept that we could do more to meet victims’ expectations around investigation and resolution of fraud.”

Preventative measures were a focus for police given the volume of fraud in New Zealand. “To be successful will require increased awareness and a collective effort to make fraud offending harder and higher risk for offenders,” the spokesperson said.

Case studies in the IPCA report showed even repeated patterns of the same fraud were not prosecuted by police.

In 2020 and 2021 police received 19 complaints about the same campervan scammer, who had sold vehicles that never arrived or turned out to be different from what the purchasers had ordered.

Just one complaint led to prosecution. Two of the campervan complaints were not properly recorded in the police database; all the others were deemed to be a civil dispute which the police could not investigate.

The campervan scammer was covered on Fair Go three times. Police have still not prosecuted the fraud, the report says. Instead, the fraudster has been deemed a “high-risk victim” by police because he contacts police whenever the fraud complainants confront him about the offending.

Another case involved a lounge suite scam on Facebook Marketplace. Multiple people paid for a lounge suite at different times that was never delivered, but the police took no action against the repeat offender.

The police’s “unwillingness” to take enforcement action may have emboldened the offender to continue, the report found.

One more example of offending was against two couples buying kit-set homes which were never provided, and another scam by the same offender using an email phishing scheme. All three couples reported the offender to the police, but they failed to link the offences together.

The investigations were “woefully deficient”, the IPCA found. “To the extent that they were investigated, the officers by their own admission sometimes lacked the capability to undertake even basic inquiries such as analyses of business records.”

Fraud has moved increasingly online, to scams involving emails, Facebook, and retail sites like Trade Me. But the police force did away with specialist fraud teams and officers in the early 2000s. Police training had not kept up with the shift to online fraud, the report found.

Some police disregarded complaints because they believed that fraud victims’ main goals was to get their money back, rather than to see the offender brought to justice.

About 8% of adults reported they were the victim of fraud or deception offences in 2021 – more than any other type of offence – according to the report. New Zealanders lose around $30 million each year to fraud, but only about 9% of those offences are ever reported to police.