Nearly 80 fraud and scam cases reported to banking watchdog every month, report shows

Have you ever received a suspicious email, call, or a text that felt like a scam?

You are not alone - scam victims accounted for 22 percent of complaints to the Banking Ombudsman over the past year.

A report from the banking watchdog has revealed it received word of almost 80 fraud and scam cases a month in the last 12 months.

Phishing and data-gathering scams were the most common, followed by online shopping scams.

Auckland resident Rita Regmi is among a growing group of New Zealanders to fall victim to a scam. In May, she received a call from someone claiming to be from her bank's fraud team.

"They said something suspicious was happening with my account, and someone was trying to transfer money.

"To verify my details, they asked for my first name, last name, date of birth, and customer number. They were very convincing."

Regmi had previously received a legitimate call from her bank's fraud team, so she believed this one was real.

A week later, over $3000 was stolen from her account, including cash from her credit card.

When she contacted the bank, it refused to refund part of the stolen money, saying she had provided the scammer with security codes, she said.

Banks called it an 'authorised payment scam'.

"They blamed me for giving the security codes, which allowed the scammer access to my account. Then they want me to repay part of the stolen money from my credit card, and interest. Why should I pay for something I didn't use? I don't understand," Regmi said.

Banking ombudsman Nicola Sladden argued banks had a duty of care to their customers.

"We see an opportunity to strengthen consumer protections, but it requires involvement from various players-banks, telcos, digital platforms, and us as consumers."

Sladden said the average loss to scams this year was $80,000, a jump of over $20,000 from last year.

"Phishing scams still drive most complaints by volume, but we're seeing growing harm from investment scams and authorised payment scams."

She said that scammers were becoming more sophisticated.

"As more people shop and bank online, scams have surged. It's increasingly hard to tell what's real and what's fake online."

Scam attempts made up 827 of the 3704 complaints received by the banking ombudsman over 2023/2024, a 27 percent rise from 2022/2023.

Consumer NZ communications and campaigns manager Jessica Walker said banks needed to do more to protect their customers.

"We think that banks should shoulder not all the responsibility, but a heck of a lot more of the responsibility than they are shouldering right now.

"Scam victims are suffering. The minute they realise they've been preyed upon, they reach out to their bank, and sometimes they're left feeling stupid and greedy, and I don't think that's ever okay."

She added that reimbursements for authorised payment scams could take five to six weeks, and sometimes customers still had to foot the bill.

"[Scammers] are just so convincing. People are buying things from websites that look exactly like the one they think they're purchasing from, when, in fact, it is not."

"And of course, you put your card details in because you think it's genuine. I don't think it's fair to say 'you gave your details away, so the liability is on you.'"

Walker said not only banks but online stores and telcos were also enabling scammers' success, and a multi-agency approach was needed.

Banks alone cannot protect customers, association says

Banks alone could not protect New Zealanders from scams and had asked the government for help, involving from police and other agencies, New Zealand Banking Association chief executive Roger Beaumont said.

"Banks are often at the end of a chain of events that leads to criminals stealing money from New Zealanders. Scams may start when people are deceived by fake websites, emails, texts, social media ads, and phone calls.

"To truly strengthen New Zealand's scam defences, everyone in the ecosystem needs to step up - including government, telcos, social media companies, and search engines. Banks can't protect New Zealanders on their own."

Beaumont said banks had got the ball rolling with the Anti-Scam Centre by targeting mule bank accounts, which were used by criminals to move stolen money.

"To take the centre to the next level, we're initially asking the government for operational support by involving the police and other relevant agencies.

"We're also asking the government to help remove any regulatory barriers to the Anti-Scam Centre working effectively and to set scam prevention expectations for other industries."

The banking industry had also agreed to review global reimbursement practices for authorised scam victims and may update the Code of Banking Practice.

Banks are expected to report to Commerce Minister Andrew Bayly this month on a voluntary reimbursement scheme for victims of authorised payment scams, like Regmi.