Cryptocurrency fraud victim's $90k loss amplified by 'recovery' scammers

A customer who lost a sum “well into six figures” to scammers pretending to be trying to help is just one of a growing number that BNZ has dealt with over the past year.

BNZ’s head of financial crime, Ashley Kai Fong, said the most notable change in scam activity over the past year was the increased volume.

In the last year, BNZ found four out of every five people had been targeted by a scam and more than a quarter had fallen victim to one, up 7% the year prior.

It found that 47% of businesses had been a victim in the last year, up from 21% the year before.

“Scams are rising, year-on-year, and as they climb, so does the toll on New Zealanders and the trail of destruction left in the wake,” Kai Fong said.

“Scams don’t just damage our finances. They cause hurt, shame, and embarrassment to their victims and they erode trust and confidence in brands, businesses, and organisations.”

In one scam that the bank dealt with recently, a customer fell victim to a recovery scam multiple times.

A recovery scam is where a scammer steals money then poses as a bank or police to help recover it.

The first scam was an investment scam. The customer had been watching investment YouTube videos and followed a link to speak to someone who advised them on a cryptocurrency investment. But there was no investment and the customer lost almost $90,000.

When the scam was discovered, BNZ changed the customer’s passwords and details and secured the account. But then someone pretending to be an investigator from a cryptocurrency company offered to help recover the money. They obtained access to the customer’s online banking and stole more money.

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Scammers are changing their tactics, BNZ’s head of financial crime says.

BNZ secured the account again and told the customer what to look for to avoid being caught in future. BNZ was not able to recover any of the money.

“Cryptocurrency scams are virtually impossible to recover as they are effectively untraceable transactions,” Kai Fong said.

“This underlines the importance of being wary of anyone calling you out of the blue and asking for details or access to your computer.

“If you get one of these calls, the best thing to do is hang up and call back on the number listed on the website, not on the one they called you from.”

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Kai Fong said people should report being targeted by a scam or having fallen victim to one.

“If you think you may have lost money to one or someone might have accessed your online banking, call your bank immediately.”

The sooner the bank knew about it, the better the chance they had to recover the money.

He said some scammers were changing their tactics.

“As the world is coming out of lockdown, unfortunately these criminals have business plans like everyone else, they’re just not as structured. They’ve got a lot of time to make up for. Everyone’s online a bit more and I guess the landscape for them to attack has become bigger.”

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Kai Fong said 25% of victims said they had clicked on a link in an email or text.

“It could be almost anything – a message pretending to be from a bank asking you to urgently confirm a transaction or from a courier company asking you to urgently pay a release fee. The link in the text messages look almost legitimate so it’s easy for someone in a hurry to tap through.

“But the website is fake. Everything you enter is immediately sent to the scammers and they use the details to log into…