Don't Let a Scammer Walk off with Your Wallet!

Fraud Awareness Month - Protect Your Money

As part of Fraud Awareness Month, the Commerce Commission and the Ministry of Consumer Affairs are sending a warning about the increasingly innovative techniques used by scammers to encourage consumers to hand over their money.

"Scammers are assuming the identities of foreign and local banks, setting up fake websites, or telling consumers the offers are authorised by government agencies to make their offers appear authentic," says Deborah Battell, Commerce Commission Director of Fair Trading.

"The techniques may be new but the aim is still to part consumers from their money."

Ms Battell offered these key tips to avoid losing money on scams:

Never send money or your bank account details to someone you don't know or trust;
Never respond to an email asking for PINs or passwords. If you are asked for account details or a PIN, suspect a scam. Genuine banks will not send an email asking for security information. If you get this type of email, don't reply and report it to the bank - no matter how authentic it looks;
If offered an investment opportunity, ask for the scheme's Investment Statement. Almost all investments offered in New Zealand must have a published Investment Statement with important information about the investment. So do most overseas investments offered in New Zealand;
If you are in business, be wary of accepting unusual orders for your goods or services from unknown overseas buyers. Do not pay any "fees" in advance of receiving cleared funds for goods or services.

"A hallmark of scams is to ask for funds in advance. Watch out for any offers where you are asked for money to pay taxes, currency exchange or any other costs. The offer doesn't exist and neither do these charges," says Liz MacPherson, General Manager of the Ministry of Consumer Affairs.

"You work hard for your money, so don't part with it to a scammer with a dead-end offer. It's unlikely you will see that money again."

Some of the most common scams from which consumers need to protect their money include:

Phishing - emails or telephone calls designed to trick people into disclosing personal details such as PINs and passwords. Phishing targets have included banks and eBay;
Money transfer schemes - also known as "work from home opportunities" or "mules" which claim to offer consumers a commission for receiving money into their bank account and then transferring it out again. People who participate in these schemes may be prosecuted for money laundering;
Illegal investment schemes - promises of high returns with little risk, little or no written information about the investment, and warnings to keep the investment "secret" are all signs of an illegal investment scheme. Many of these schemes are targeted at particular groups including the elderly, ethnic and church groups;
Unsolicited offers of overseas shares - very persistent telephone callers offer to buy or sell shares in overseas companies. When people send money the shares turn out to be worthless. People who hold worthless shares are often contacted again by what appears to be another "broker" who has a buyer for the shares. But the seller must send more money to arrange the transfer. If they do, that money too is lost;
Advance fee fraud - includes the famous Nigerian letter and El Gordo Lottery scams. They work by persuading you to send money (often overseas) in return for greater payments/riches;
Spyware, such as keylogging - a "trojan horse" programme installed by an internet virus that records the user's mouse clicks and keystrokes and transmits them via the internet to the virus creator. You don't even know that this is happening. Some financial institutions have put in place systems to combat these types of attacks;
Overpayment scams - a buyer sends a seller a counterfeit cashier's cheque, corporate cheque or personal cheque for an amount exceeding the agreed sale price. The seller is asked to deposit this cheque and immediately transfer the excess amount back to the buyer. The buyer's cheque will later "bounce" because it is counterfeit, often after the seller has sent away the excess funds. People selling cars, motorcycles, computer gear, pets, or accommodation should be wary of these scams which defraud innocent sellers.

Background

Consumer scams are crimes of dishonesty, such as forgery, counterfeiting, on-line deception, and theft, that target people who seek to purchase goods and services. Potential victims can be those who use computers and the internet, older people, people whose financial situation makes them interested in "get rich quick schemes", and people who use mobile phones.

As part of a trans-Tasman approach to combat consumer fraud and scams targeted at consumers, the Australasian Consumer Fraud Taskforce was established in March 2005 and comprises 18 government regulatory agencies and departments in Australia and New Zealand.

Agencies participating in the Taskforce are:

New Zealand Government: Commerce Commission; Ministry of Consumer Affairs.

Australian Government: Attorney General's Department; Australian Bureau of Statistics; Australian Communications and Media Authority; Australian Competition and Consumer Commission; Australian Federal Police (represented by the Australian High Tech Crime Centre); Australian Institute of Criminology; Australian Securities and Investment Commission; Department of Communications, Information Technology and the Arts

State and Territory Governments: All State and Territory Police jurisdictions; Australian Capital Territory - Office of Fair Trading; Consumer Affairs Victoria; New South Wales - Office of Fair Trading; Northern Territory - Department of Justice; Queensland - Department of Tourism, Fair Trading and Wine Industry Development; South Australia - Office of Consumer and Business Affairs; Tasmania - Office of Consumer Affairs and Fair Trading; Western Australia - Department of Consumer and Employment Protection.

New Zealand private sector participants in 2007 Fraud Awareness Month: Visa, members of the New Zealand Bankers' Association, Telecom, Vodafone, TelstraClear, and Trade Me.

Consumers who think they've spotted a scam can get more information and report them on Scamwatch.

Consumers affected by scams can complete the Fraud Awareness Month online survey [link to AIC website].

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