Bank scams: MBIE, bank survey says $198m lost to scammers; Netsafe calls on next Government to create anti-scam centre - NZ Herald
Bank scams: MBIE, bank survey says $198m lost to scammers; Netsafe calls on next Government to create anti-scam centre
For the first time, we’ve got a concrete figure for the amount that New Zealanders lose to online scams - at least those involving banks.
A Ministry of Business, Innovation and Employment (MBIE) survey, drawing on data from New Zealand’s 11 largest financial institutions, says Kiwis lost $198 million* to online scams in the year to September.
Meanwhile, new research from Netsafe estimates that the total amount lost was just over $2 billion.
After taking flak from a number of victims, and sparking a probe by the Banking Ombudsman, banks have moved to tighten their defences and procedures.
"Putting a dollar figure on scam losses really helps show the gravity of this issue impacting everyday New Zealanders. That’s why our banks are stepping up with a range of recently-announced initiatives to further protect customers from scams," New Zealand Banking Association chief executive Roger Beaumont told the Herald.
"Among other things, we’re also looking at options for a confirmation of payee service to enable anyone making an online payment from one bank account to another to check the name of the account they are paying. We are investigating the technical ability to do this, along with privacy and information-sharing considerations," Beaumont said.
There was no timeline for the measure.
Estimated $2 billion in total losses
Netsafe chief executive Brent Carey said the new Government also has to create a single agency to co-ordinate efforts to deal with the rising tide of online fraud.
A separate survey by Netsafe and the Global Anti-Scam Alliance - also released today - found that 17 per cent of 1000 respondents had lost money to a scam over the past 12 months, with an average loss of $3165, which extrapolates to $2.05 billion lost nationally, indicating that New Zealanders are losing a lot of money beyond bank scams too. Netsafe earlier estimated $470m in losses, while the Government’s Computer Emergency Response team has reported just $22.4m in total financial losses from online fraud.
The Netsafe survey also found that two-thirds of victims don’t report an online scam to law enforcement.
Beyond the perennial issue of people being shy of admitting they got duped, Carey says there are issues about resourcing, people being confused about where to turn, and co-ordination between an alphabet soup of Crown agencies, while often struggling to get cut-through with private firms.
"We know that people are not even thinking that making a report will make a difference," the Netsafe head said.
Carey added that when people do report online fraud to the various authorities, "what they do with that data is worrying. It’s not joined up".
"We’re calling on the next Government to look at an anti-scam centre for New Zealand," he told the Herald.
"We would really like a cross-discipline approach. We need the social media platforms, the banks and Government to be putting resources into this anti-scam centre so that we can have better data, better front-line reporting and better victim remediation. Another thing that concerns me is that a lot of people aren’t recovering the money that’s being lost. More than 15 per cent in our survey didn’t get their money back. We need to put more effort into recovery."
Across the Tasman: Centralisation, serious funding
Australia’s Budget 2023 included A$86.5m ($91.4m) to establish a new National Anti-Scam Centre to centralise efforts (notably, the office of the e-Safety Commissioner - Australia’s equivalent to New Zealand’s Netsafe - saw its funding quadruple with a A$131m injection. Here, Netsafe - which got a one-off $690,000 bump in Crown funding, operates on an annual budget in the region of A$4.5m).
Would Carey like to see the incoming Government fund a New Zealand Anti-Scam Centre funded to an equivalent level?
"That would be good," he said. "The amount that the previous Government suggested - $1 million - wouldn’t fund much, so I think they’re going to have to think about funding it properly."
It remains to be seen what the next Government makes of Carey’s call for a national anti-scam centre. Neither major party had any specific cybersecurity or online fraud policy going into the election, while National’s technology spokeswoman Judith Collins is holding fire on any comment until the shape of the coalition emerges.
But the banks are already on board. "Scams go much wider than our industry, affecting government agencies, telcos, social media companies, and internet service providers. An anti-scam centre would provide a centralised and co-ordinated multi-sector approach to fighting scams from a New Zealand-wide perspective," Beaumont said.
Whatever happens with the incoming coalition, it’s probably a sure bet that the outgoing Government’s plan to move Netsafe funding under the Department of Internal Affairs will be shelved - a move that retired District Court judge and cyber-law specialist David Harvey saw as compromising Netsafe’s independence as it navigates freedom-of-expressions concerns.
Netsafe is the approved agency for the Harmful Digital Communications Act 2015 (HDCA), and runs under a mix of the Ministry of Justice, Ministry of Education and private and philanthropic funding. Given that the HDCA was the creation of Judith Collins and Amy Adams as successive Justice Ministers under John Key, it seems unlikely that the returning Collins would support the dismantling of her own work.
How can I tell if I’m being scammed?
"Checknetsafe.nz - you can type in a URL or copy and paste a web address to see if it’s been flagged as a scam," Carey said.
"Also, we’ve worked with Sorted to produce the Little Black Book of Scams, which you can download from Netsafe.org.nz, which educates about typical scams.
"And we’re also working with the FMA [Financial Markets Authority] as well. So when they flag investment scams, we’re incorporating those websites as bad websites at Checknetsafe.nz."
Read More
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- ID theft puts debt collector in the same boat as those she usually chases
- Netsafe says cyberbullying costs NZ $1b, online fraud $470m - dwarfing Cert’s figure
MBIE’s spokesman for Fraud Awareness Week (Nov 13 - 19), Ian Caplin says the most important thing to remember is that "real investments don’t just come out of the blue." If you’re unsure, contact a bank using a number you’ve sourced independently. Be very wary of anyone using time-pressure tactics. "And don’t be shy of getting a second opinion from friends and family."
Caplin has first-hand experience. He told the Herald he was called by a smoothing-sounding scammer, with a Kiwi accent, last week. He cut them off, and reported them. MBIE is encouraging anyone contacted to report an approach to the FMA.
The MBIE spokesman said the ministry could not comment on the merits of an anti-scam centre. Policy was up to the incoming Government. But Caplin did note that MBIE chairs a long-running if low-profile inter-agency working group that includes Cert NZ, Netsafe, the Serious Fraud Office, Te Ara Ahunga Ora - Retirement Commission, the FMA, the DIA, police, the Banking Ombudsman Scheme, the New Zealand Telecommunications Forum and banking industry reps.
Netsafe-GASA survey key findings
- 17 per cent of 1000 respondents had lost money to a scam over the past 12 months, with an average loss of $3165, which extrapolates to $2.05b lost nationally.
- But nearly two-thirds of victims (59 per cent) did not report the scam to law enforcement. The report found scams are mostly shared with the victims (56 per cent) bank and then the police (41 per cent).
- Nearly two-thirds of Kiwis (62 per cent) encounter a scam once a month, and over half (55 per cent) experienced more scams in the last 12 months than previously.
- Scams are appearing in multiple ways through text messages, social media, and instant messaging apps. The most frequent communication channel used was email (62 per cent), where a scammer would pose as a trustworthy source the victim would know.
- Gmail and Facebook are the most-used platforms by scammers, with Outlook, Instagram and WhatsApp taking third to fifth place.
Source: The State of Scams in New Zealand - 2023, produced by Netsafe and the Global Anti-Scam Alliance (GASA).
* The financial institutions that provided data for MBIE’s survey were ANZ, ASB, BNZ, Co-op Bank, Heartland, KiwiBank, Rabobank, SBS, TSB, Unity and Westpac. The figure provided covered the year to the end of September 2023. The total lost was $198,372,837.17.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.