New Zealanders are losing six-figure sums to scammers pretending to offer anything from jobs to cryptocurrency investments and technology support.
Financial Services Complaints Ltd, an external dispute resolution service for the financial services sector, said it recently investigated a complaint from a retiree who lost $250,000 to a company falsely claiming to offer cryptocurrency trading services.
He thought he was signing up to an online platform for trading crypto and transferred money from his bank account to a money transfer service.
When the victim thought he was confirming regulatory declarations, he was actually authorising transfers to a financial service provider in the Middle East.
“Scammers use extremely sophisticated methods to recreate legitimate tools, such as websites, or reassure consumers and portray themselves in convincing ways, that can fool even experienced investors,” FSCL’s ombudsman Susan Taylor said.
She said people should check out the intended recipients of money they were transferring, not rush into making payments and be cautious about downloading anything.
Banking Ombudsman Nicola Sladden had a similar message.
She said the percentage of complaints her scheme received about fraud and scams had dropped from 22% of its caseload last year to 13% this year.
But the average amount being lost in the cases it considered rose from $73,000 to more than $100,000.
In one case it dealt with, a woman who had been having trouble with her internet speed received a call from someone claiming to be a technician ringing to fix it .
That person tricked her into downloading remote access software and asked her to log into her internet banking to test her internet speed.
The scammer then logged in and set up a payment of $14,200. The woman said she was sent an authorisation code for the payment but when she received the text, she hung up the call and shut down her computer.
Her bank would not reimburse her for the loss because it said she did not take reasonable care.
The ombudsman scheme investigated and said many customers would not know that logging into their bank account when someone was working on their computer remotely could disclose their login details.
“We also had reservations about whether [she] had in fact texted the authorisation code and online screen code to the bank.
“[Her] evidence was very clear and consistent on this point: she maintained she did not send a reply text and hung up the phone when she saw the test. The bank did not investigate this point.”
The bank ended up reimbursing the customer.
Sladden said people should stop and think before acting.
“Check you’re actually dealing with the legitimate organisation by contacting it directly using contact details you find yourself, not those provided by the sender – and read any messages from your bank carefully. Report suspicious approaches to help protect others from becoming victims.”
She welcomed amendments to the Code of Banking Practice which will introduce more protection for customers from 30 November, including identification of high-risk transactions, pre-transaction warnings to customers and improved information sharing.
Banks have committed to reimburse eligible customers up to $500,000 for authorised payment scam losses if a bank does not meet those commitments.
“These changes will undoubtedly strengthen consumer protections,” Sladden said.
“But they do not diminish the need to stay alert and take care with your banking, which remains the best way to protect yourself from scams.”
In another case, a woman authorised two payments of $5000 to another bank account as part of what she thought was a legitimate cryptocurrency investment.
The bank thought the payment was suspicious and called her but she said she authorised it.
After another payment a few days later, she called to report the scam.
A scammer then contacted her and tricked her into believing he could help her get her money back.
He told her to accept $4200 into her bank account as part of recovering what she had lost but she was being used as a money mule.
The bank got in touch and told her she had received fraudulent funds, and froze her account.
She was not able to access any money other than her wages until it completed its fraud investigation.
She had recently been made redundant and was living off money her husband put into her account every week.
Four months after reporting the first scam, the bank told her it would not reimburse her initial $10,000 loss and it had taken the $4200 out of her account that had been received fraudulently.
The ombudsman said the bank was not required to reimburse her for the $10,000 and was entitled to reverse the $4200.
But it said the bank did not treat her fairly and reasonably.
It offered her $1200 to compensate for the stress and inconvenience she suffered.
rnz.co.nz
