The govt doesn’t know how it will deliver on Global Fraud Summit pledges

Sunday, 31 March 2024

Former front-line police officer Casey Costello represented New Zealand at the London Global Fraud Summit.

ANALYSIS: The easy bit for associate Police Minister Casey Costello was pledging New Zealand’s cooperation to fight scams alongside the other countries that sent ministers to UK Prime Minister Rishi Sunak’s Global Fraud Summit in London.

The hard part will be building the capacity to fulfil those pledges, but Costello said: “It’s a massive priority for me.”

Like the UK, New Zealand has been targeted by an unprecedented wave of scam attempts by organised criminals utilising social media, emails, phone calls and texts to hunt for victims.

So, when Sunak’s call came for New Zealand to send a representative to the March 11 summit in London, Costello, a former police officer who rose through the ranks in South Auckland to become a detective, was dispatched.

The event ended with New Zealand, Australia, Canada, France, Germany, Italy, Japan, the Republic of Korea, Singapore, the United Kingdom, and the United States signing up to commitments in a communiqué to work together to crack down on the criminal networks behind what Costello says is New Zealand’s most common crime.

The countries agreed to collect and share scam data and strategies, to work together to bring criminals to justice, and even come together to impose international sanctions.

That included the possibility of the countries working together to impose sanctions.

Britain's Prime Minister Rishi Sunak convened the Global Fraud Summit.

Costello said the pledges communicated an intention “to do something”, but, said: “We need to work now with how we broaden our crime response to include this piece of work.”

“It was about demonstrating our commitment and our appreciation of the issue, and it gives us an opportunity to drive those conversations within these international relationships. That’s the foundation we will build on from here,” she said.

Playing catch-up

New Zealand was behind other countries in its response, she said.

“I think we are behind, and yes, we are a target, but our geographical isolation, us being down the bottom of the world with a relatively small population, we are a little bit behind in terms of the trends they are seeing.”

“We’re all finding the same massive growth in fraud offending, the offending models, and the types of crimes we are dealing with.”

The national defence against scams was both the responsibility of public and private actors, including banks and social media companies.

But here New Zealand had some catching up to do with other countries at the summit.

“In terms of the industry engagement, and the priority given with enforcement, we [New Zealand] are not on par, I would say,” she said.

So unimpressed is the Government with banks on scams, Commerce and Consumer Affairs Minister Andrew Bayly issued them with an ultimatum at the start of March to move quickly to protect people from scams, and improve compensation, or the Government could step in to force them.

Ending victim shame, educating the public

“Victims of fraud often feel significant shame and stigma,” the communiqué said.

Borja Ares is one of a network of scam victims who have stood up and demanded better protection for New Zealanders from banks, and authorities.

Scam victims, and national organisation Victim Support, have claimed the banking industry is victim-blaming to deflect attention away from weaknesses in bank payment systems which they say scammers are exploiting.

Costello said there remained a tendency in New Zealand to blame victims.

“As we get more and more stories of people who did their due diligence – they did everything right – and still got caught up, that’s building an awareness,” Costello said.

Victim-blaming can result in people being too ashamed to report crimes, but victims say so too does Police disinterest.

Costello praised Singapore’s multi-channel system for reporting scams. She also praised banks for investing in a public awareness campaign.

Information-gathering and sharing

The communiqué pledged to share what they learned, information, and resource across government, law enforcement, industry and regulators.

Last year, the Ministry of Business, Innovation and Employment started collecting data from banks, estimating around $200 million had been lost to scams in New Zealand in just 12 months.

The banks would like to see the work done by an anti-scam centre modelled on the one in Singapore, and have asked the Government to order police to lead it.

Costello said the Government had met with banks to discuss an anti-fraud centre to coordinate the national defence against scams, but, she acknowledged it had not been taken further.

Singapore’s anti-scam centre is run by the country’s police. In New Zealand, police are focused on other forms of crime, especially violent crime.

Law enforcement

Scam victims believe police have little interest in catching scammers, and are instead focused on domestic crime, especially violent crimes.

Costello felt law enforcement on scams in New Zealand was not “on par” with other countries, saying we had a tendency to see fraud as a lesser crime compared to crimes of violence.

“This isn’t just about enforcement, because prosecutions are really hard to achieve across borders, so we have to be able run disruption, pivot quickly, freeze accounts, that sort of thing to try to get on top of this.”

After millions of dollars of losses to investors, Google agreed to work with New Zealand’s financial watchdog to get adverts for scams blocked from the internet search giant’s Google Adwords service. But it appears the first engagement did not yield the hoped-for result.

Staunching scam contacts

The communiqué said it was vital consumers could trust the origin of the communications, such as calls and texts.

Banks say telecoms companies have worked closely with them to reduce scam texts, but they are angry with social media companies like Meta, owner of Facebook.

One senior fraud executive at one of the big four banks said when it alerted Meta to an advert trying to recruit money mules in New Zealand, it took three months for the social media company to take the post down.

“In Australia they have got good engagement. In New Zealand, we haven’t driven it, and we can,” Costello said.

“When there’s enough social pressure, they are capable of doing good things. I just think, let’s give them the opportunity to do better, and bring them to the table,” she said.

Costello said social media giants attended the London summit.

Costello acknowledged that New Zealand lacked widely-used digital identities like some countries now boasted, describing the government’s RealMe system as clunky and not fit for purpose. She had not heard of any digital identity providers emerging to deliver on the promise of the Digital Identities Services Trust Act.

Imposing sanctions

The communique said it countries would would bolster collaboration, including via sanctions or other mechanisms.

New Zealand does not have an autonomous sanctions act. It can only impose sanctions against individuals and entities, if they have been adopted by a resolution of the United Nations Security Council.

National’s Gerry Brownlee pushed for an autonomous sanctions act while in opposition, but instead, when the Labour government decided to impose sanctions on Russia for its invasion of Ukraine, it had to pass the Russia Sanctions Act to do it.

Discussion continues in the new Government about whether an autonomous sanctions act is a good idea.