OVER $1M LOST IN ‘SIM HIJACKING’ SCAM
Successful Otago real estate agent among several victims to lose hundreds of thousands in sophisticated scam. Hamish McNeilly investigates.
A New Zealand-born Chinese man swindled at least $500,000 from victims through a sophisticated mobile phone ‘‘sim hijacking’’ scam before fleeing the country.
The fraud involved impersonating victims and applying for new sim cards through their telco, before accessing bank accounts and withdrawing huge sums of cash in the weeks before Christmas last year.
His victims included a woman in Mangawhai Heads who lost more than $200,000, a retired man in Remuera who lost $180,000 and an Otago-based real estate agent who lost $120,000.
That real estate agent told the Sunday Star-Times he began experiencing network issues with his phone while in a remote part of the province, a week before Christmas.
But when he returned home the problem still persisted, and so he rang Spark. He was shocked to learn someone had changed his sim card the day before.
‘‘That’s when it all snowballed.’’
A few weeks earlier he had received a text sent saying his Westpac password had been suddenly changed.
While his bank told him not to worry as he would receive a text if money was transferred, that earlier conversation suddenly became a ‘‘red-flag’’.
Trying to access his bank account the man, who spoke on the condition of anonymity, found he was shut out.
‘‘That’s when I lost all colour in my face.’’
He ran to his local Westpac branch, banged on the door of the manager and said ‘‘I’m in trouble’’.
About $120,000 had been transferred from his account over multiple payments.
‘‘That wasn’t great.’’
It wasn’t until Christmas Eve, when the bank confirmed to the father-of-two children with another on the way, it would refund the money. Not wanting to stop there, he tried to get answers from Spark on how the person was able to effectively impersonate him, and transfer his sim in a scam known as ‘sim hijacking’ or swapping.
It appeared the offender, who the Star-Times understands was born in New Zealand but left for Hong Kong when he was only weeks old, returned in late 2019 with fraud on his mind.
That involved the man, who is aged in his 20s, renting an Auckland apartment near SkyCity casino, getting a New Zealand driver’s licence, and recruiting several ‘‘cash mules’’ to help set-up bank accounts to wash the stolen cash through the casino.
Detective Inspector Scott Beard of the Auckland city police told the Star-Times that between October 2019 and January 2020 around 20 cases of sim swapping were reported to police.
Although the offending appears to have stopped since then, the losses were more than $1 million.
He confirmed three New Zealanders had been charged in relation to sim swapping fraud offences, with one sentenced to a term of jail, another before the courts and the third – understood to be the Hong Kong resident – subject to an outstanding arrest warrant.
A SkyCity spokeswoman said the company could not comment on this specific case as it was currently being investigated by police.
SkyCity has robust antimoney laundering programmes in place to mitigate the risk of money laundering and ‘‘work closely with the police to assist in combating financial crime’’, she said.
Meanwhile the Otago-based man was still in the dark over why he had been targeted.
He remained frustrated over Spark declining to release security questions they asked the alleged offender, citing privacy reasons, and he was now using Wellington-based lawyer
‘Some scams are incredibly sophisticated and they are targeted at a specific person, or they can become targeted at a specific person.’ MARTIN COCKER NETSAFE CHIEF EXECUTIVE
Sandy Baigent to help him in his fight.
‘‘I feel like I have a case against Spark,’’ he said.
That legal battle started after cancelling his account with Spark over the incident, who in turn referred him to a debt collector.
Baigent said she was aware of four New Zealanders who had lost more than $500,000, and understood all were on the Spark network
The man said he wanted to be reimbursed for his time spent ‘‘making this right’’, an apology, and for all the anxiety the company caused his young family.
Samantha Smith, of Spark, said the company had introduced measures to prevent fraudulent sim swapping, including customers visiting a Spark store and presenting identification before a swap was approved.
However porting fraud, where a number was moved to a new network, was proving complicated and ‘‘requires a coordinated industry-wide change to the porting rules’’.
The Telecommunication Forum’s chief executive Geoff Thorn said the scammer contacted the victim by a variety of means trying to get access to their bank accounts.
With many of the banks using texts for authentication the offender turned their attention to the person’s cellphone.
Inspector Beard said to prevent being targeted, members of the public should treat any correspondence claiming to be from their bank and which asks them to enter their personal information or banking details as fraudulent.
He also advised people to change their online banking passwords regularly.
Netsafe chief executive Martin Cocker said there appeared to be a level of sophistication to the sim card scammer, who was ‘‘heavily invested’’ by making the effort to return to the country of his birth.
‘‘Some scams are incredibly sophisticated and they are targeted at a specific person, or they can become targeted at a specific person.’’
In this case a person was prepared to travel to New Zealand to dupe his victims and ‘‘that is a huge investment and huge risk for the scammers to take, but obviously at some point they felt the victims were worth that investment’’.