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Kiwis Suffer $4.4m Internet Fraud Losses

by luisboller

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A handful of New Zealanders have been blackmailed over the past few months after taking part in "naked video chat sessions" with overseas fraudsters, says cyber-safety organization net safe.


Chief executive Martin Cocker said the scams, which were entirely for financial gain, were a new phenomenon that had sprung up over the past three months.


The fraudsters, some of whom appeared to be based in the Philippines and Morocco, recorded the webcam sessions and then threatened to upload them to YouTube and other social media websites.


Some of the victims had paid up to $600, but the blackmailers then just made demands for more money, Cocker said.


His advice for people in such a situation was that it was not a good idea to pay. "Unfortunately, you have got to front-foot the potential damage, and you can imagine for people who are in relationships or sensitive roles that is a very difficult thing to undertake."


Cocker said he was not aware of any of the fraudsters seeing through their threats to upload any of the videos to the internet, to date.


Some of the webcam blackmails had been notified to Nescafé after the involvement of the police, but Cocker said it was difficult for authorities to take any action. "People are embarrassed to report it, but they get into a position where they are in real personal difficulty and they are looking for any possible remedy or help, and that can lead them to call net safe to get advice."


The incidents were among a total of 562 online frauds reported to Nescafe’s website,, over the year to last Friday that cost New Zealanders a total of $4.4 million. "Blackmail is the growth theme," Cocker said. "Ransom ware", where a security hole in a computer allowed cyber criminals to lock an internet user out of their machine  - on the pretext of viewing pornography - and demand payment, had been "a common scourge" for both home and small business internet users this year, net safe said.


It has long argued that reported frauds are only the tip of an iceberg. Cocker speculated total annual losses to internet fraud probably lay somewhere between $100m and $400m.


The reported losses during the past year were four times higher than during the year to August 2012, with both the number of frauds and their average size doubling.

Some of the increase could be attributed to a new working relationship Net safe had with the cross-agency Consumer Fraud Working Group, which meant frauds were more likely to be reported to the website, Cocker said. “But we believe New Zealanders are also facing increasingly well-organized and resourceful cyber criminals."


Seven of the victims reported losing more than $100,000, and about $1.3m of the total losses were from dating and romance scams. "This category of scam has previously shown the largest losses recorded over the last two years," Cocker said.


"This year, however, we've seen upfront payment or advanced fee fraud take the top spot with more than $1.5m lost to inheritance and government-grant type scams where the victim is persuaded to part with their own money before they can receive their windfall."


Net safe was continuing to see a wide range of scams and frauds, "including well known phishing scams or spam emails which have been arriving in inboxes for over a decade".


Investment scams, where New Zealanders were tricked into putting their savings into overseas companies promising high returns, cost Kiwis $370,000.


The largest number of reported frauds was simple online trading scams, with 350 people reporting they had lost money when purchasing goods online.


"Lots of buyers have suffered at the hands of scammers operating on popular buy and sell pages established on the Facebook platform," said Cocker. "Individuals can easily create a profile on a local Facebook group, list items for sale and give a buyer their bank details.


"We've had many people report losing money when the cheap iPhone or clothes they've sent payment for has failed to arrive and the seller has disappeared, blocked them from the page or ignored all messages."


Some online shoppers had also suffered when buying goods from little known e-commerce websites, including sites operating with a "" domain name but which were are actually run from overseas, Net safe said. "It pays to spend a few minutes researching any company you are thinking of buying from to see what other customers are saying."


  • Richie Hugh
    Scamming is very easy, it isn’t your fault if you a victim, internet security is just very loose. 

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