‘Financial crime is increasing in both scale and complexity’

International scammers are estimated to be draining hundreds of millions of dollars from Kiwi victims yearly, with cases surging.

Last year, police admitted it was impossible to identify overseas scammers and New Zealand investigators are “not focused” on solving international scam crimes. So, how do you catch an invisible criminal? And what justice is there for Kiwi victims?

Scams are one of the most pressing challenges of our time, according to The State of Scams In New Zealand 2023 report and survey by the Global Anti-scam Alliance and Netsafe.

“Scams, evolving in complexity and frequency, remain a significant concern, and New Zealand, like many countries globally, stands at the forefront, seeking ways to combat this menace,” says the report.

Of 1000 people surveyed for the report, 17 per cent had lost money to scams, with an average loss of $3165, amounting to a staggering $2.05 billion nationally.

The report found scams account for 0.5 per cent of New Zealand’s GDP, highlighting a pressing concern for the nation’s economic health.

But the recovery numbers are sobering, with only 15 per cent of people managing to reclaim all their lost funds.

The rise of fraud and deception

There has been a sharp increase in fraud and deception crime in New Zealand, almost doubling in one year.

The Ministry of Justice Crime and Victims Survey showed fraud is now the most common type of offence overall. There were 510,000 offences between November 2021 and November 2022, compared with 288,000 offences for 2020-2021.

Ministry of Justice sector insights, strategy governance and finance general manager Rebecca Parish acknowledged the digital impact driving fraud.

“Some additional analysis by the Ministry of Justice last year found that the increase we observed was driven by both fraud relating to the use or attempted use of a bank/credit card, and fraud which relates to the victim being tricked into giving money or a service.

“We also know that the large majority of fraud and deception offences, about 84 per cent, occur online or over the phone.”

Fraud and deception were the only offence types that had a significantly higher incidence in 2022 than in 2021. “The rates of most crimes have remained steady compared to previous years, but fraud and deception have increased significantly.”

Fraud and cybercrime also had a high record of repeat victims — 55,000 people, making up 11 per cent of all scam victims.

Despite the increase, many fraud crimes are not reported to police at the same rate as other types of crime.

Previous cycles of the survey suggest that people report around 25 per cent of offences to the police, and fraud and cybercrime appear to be the least reported, at 6.5 per cent.

“Victims of these crimes were significantly less likely to have reported the offence to the police because their bank or credit card company took care of it — 47 per cent of respondents gave this reason — or because they reported it to another authority, 20 per cent of respondents gave this reason.”

The Independent Police Conduct Authority [IPCA] found major deficiencies in police responses to scam complaints. IPCA chair Judge Colin Doherty said the 2022 report was initiated following several complaints about the way police had handled fraud complaints.

“To meaningfully reduce the number of New Zealanders affected by fraud we recommend police lead the development of a fraud prevention strategy incorporating both public and private sector agencies.”

The IPCA upheld each of the seven specific complaints outlined in the report, but also acknowledged that addressing these deficiencies is only part of the solution to New Zealand’s overall fraud problem. “Frauds are too often being regarded as civil disputes or minor offences. They are not receiving the priority they deserve, and the needs of victims are too often not being met.”