Kiwis are being asked to remain vigilant about job scams after a woman was swindled out of $25,000 by an “employer” who contacted her on LinkedIn.
Financial Services Complaints (FSCL), an independent non-profit dispute resolution service, investigated the woman’s ordeal and released the details on its website today.
It all started when Rika (not her real name) received a message on LinkedIn from a man named John, who claimed to be the owner of an American-based construction company.
He told the woman that his company was in the process of finalising a tender to build a mall in Tokyo and asked if she would be interested in an administration job.
He said the role was part-time, with everything being done by phone or email.
John also told Rika his company was working with investors, and he would be able to start paying her weekly once construction had started.
Excited by the opportunity and additional income, the woman accepted and sent John her CV, contact information, account details, and a copy of her driver’s licence.
Rika got to work immediately, doing everything that was required of her. As they spoke more regularly, John and Rika built a “close” relationship.
After a while, John approached Rika, claiming the company had struggled to find and finalise the funds from their investors. He told her they only needed $25,000 to reach the necessary funds and asked if she wanted to invest.
Rika said she wanted to help but did not have $25,000 to invest. John suggested she apply for a loan and said her return on investment would be “ten times that much”. He also agreed to pay the monthly repayments on the loan.
Trusting John, Rika applied for four credit cards with a combined credit limit of $25,000.
Her applications were approved, and the cards were sent to her home. She phoned the lender to activate the cards and sent the card numbers, expiry dates, CCV numbers, and PINs to John.
A few months later, Rika received a phone call from the lender, who told her that her payments were overdue. Rika immediately called John, who promised to pay.
A month after that, the lender sent Rika a letter of demand, saying they would hand her account to a credit agency if she did not make payment. She phoned the lender and explained her agreement with John.
The lender said she was responsible for the debt and suggested she pay the arrears to avoid legal action and ask John to pay her back.
Worried that she would lose her house, Rika started making payments.
She managed to pay back $18,500 before falling into financial hardship. She stopped paying and told the lender she had been the victim of fraud.
The lender investigated the complaint but found her funds were not fraudulently accessed as she claimed. It said she willingly gave John her account details and knew his intention was to withdraw the full $25,000.
The lender suggested she file a complaint with the police.
Unhappy with the lender’s response, Rika complained to FSCL, which found that she had been the victim of a scam but that there was no basis for asking the lender to reimburse her as she was now liable for the debt on account of giving John her card details.
FSCL also raised concerns over the lender’s approval of four credit cards, suggesting it could be a case of irresponsible lending.
As a result, the lender agreed to write off the remaining $6500.
The case prompted a warning from FSCL, which said it had seen a “steady number” of complaints this year, which included job scams targeting those navigating a challenging job market.
“Given the challenging job market at present, people may be more vulnerable to this type of scam, particularly if they have recently suffered a job loss,” Financial Ombudsman Susan Taylor said.
“In these cases, consumers almost always communicated with the scammer via email or social media. They promise you a job, but in reality, what they want is your personal information and money. The excitement of new job prospects shouldn’t overshadow the importance of vigilance and verifying the source of the offer.”
She said one should never hand over personal information or bank account details without thoroughly investigating the person or organisation asking for those details.
“This case highlights the crucial need for consumers to safeguard personal and financial information, especially when dealing with online contacts,” Taylor said.
