Scam Information

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New Zealand companies are being warned to look out for potential cyber-fraud and scams that specifically target small to medium-sized businesses.
Smaller businesses may not have the time, knowledge or resources available to them that larger companies have to invest in security systems that provide better resilience to scams. This is a vulnerability that scammers know of and use to their advantage.
A recent PriceWaterhouseCoopers research report into business cybercrime and fraud showed that New Zealand has climbed the global crime rankings into fourth place (out of 78 countries). The retail and consumer category was the top sector experiencing fraud in New Zealand. PwC forensic services partner Eric Lucas said the survey showed that cybercrime was increasing. "This is the first time cybercrime has been included in the survey and is now New Zealand's third most reported type of economic crime."

Current small business scams to watch out for:

Online trading scams

Businesses that trade online, such as holiday home owners, car and business equipment dealers and other traders of high-value items are being targeted by scams. The initial enquiries almost always come by email from an overseas buyer. The initial enquiry can look very legitimate and may even come from a company looking to do a b2b transaction. The red flag usually comes when the final price is discussed. The buyer may offer a price higher than the sale amount for the product or service on offer and claim that the overpayment needs to be sent to a broker, holiday consultant or other third party. Often the scammer will request that the money transfer be transacted through Western Union or by cheque, which is another red flag, but sometimes the transaction is offered via a stolen credit card to appear more real. Variations on this scam include the emailing of fake payment receipts, such as a screenshot of a Paypal statement, and goods paid for with stolen credit cards and 're-shipped' to the scammers through unsuspecting mules.

Ministry of Consumer Affairs’ advice

Be very wary of unusual offers to purchase your goods from overseas buyers. Never except a higher payment for your goods on the proviso that you send the overpayment to another party as you could become a money mule, or worse still lose your own company’s funds. Never give out private information by email and consider putting in place email and internet security options in your workplace. Ensure you have an internal system in place at your company to identify, and report, any suspicious trading activity.

Fake directory listing scams

This is a perennial favourite by scammers that target businesses. The directory scam (or otherwise known as the pro-forma invoicing scam) exploits the vulnerability of businesses that do not have robust enough financial systems. The scammers send out a fake invoice to your company to pay for a ‘listing’ in an industry or online directory. The hope is that whoever pays your invoices will not realise that the listing is fake and will just pay the invoice. Of course once the scammers have gotten away with it then they'll keep invoicing your company for the fake listing until someone finally notices. Newer twists on this scam include receiving full colour fake ‘proofs’ of your listing along with the invoice, an email showing your online listing that may be live on a website and even quite aggressive phone calls by the scammers saying that your company has signed up for an annual listing in their directory and that they will call in their lawyers or debt collectors if you don’t pay up.

Ministry of Consumer Affairs’ advice:

Inform the company in writing or by email that the advertisement they are charging you for was not authorised and that you will not be paying for it. Keep records of contacts and requests regarding advertising, including emails and phone calls. Seek legal advice if your company is threatened with legal action. Ensure that your financial system is robust enough to uncover incorrect or fraudulent transactions.

Too good to be true offers

There have been a number of scams sent by email over the last few years offering deals that specifically target businesses such as staff holiday packages, exhibition and trade show deals, cheap ‘overstock’ products, etc. The Ministry of Consumer Affairs uncovered one of these scams this year being run out of New Zealand and targeting local importers. A fair number of companies fell for this scam and other scams being run by the same people. Many thousands of dollars were lost before MCA went public with the information, which you can read about here.

Ministry of Consumer Affairs’ advice:

If it sounds too good to be true, then you know it’s a scam, but do your employees? Make sure that everyone in your organisation is made aware of what to look out for in terms of cyberfraud, scams and electronic crimes and consider investing in a cybersecurity training programme. Netsafe have more information you can read about here. Also, sign up to our Twitter of Facebook feeds and keep up to date with the latest scams doing the rounds.

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