Talking about money key to preventing scams

Talking more about money could save many New Zealanders from falling victim to scammers, says the Commission for Financial Capability.

Fraud Education Manager Bronwyn Groot says a hallmark of scammers is swearing their targets to secrecy, yet any such request should be seen as a red flag. Groot is speaking out during Sorted’s annual Money Week, which this year aims to get New Zealanders opening up on the touchy subject of money.

“If you meet someone through a dating website, or someone contacts you about an investment opportunity, and demands you keep your relationship with them secret, that’s all the more reason to talk about the situation with your family, bank or lawyer,” says Groot. “Someone who cares about you will not demand confidentiality, and professional organisations are not allowed to.”

Netsafe estimates New Zealanders lose more than $33 million a year to scams, though Groot says this is the tip of the iceberg.

“We don’t know the true figure because people don’t talk about being scammed. They’re embarrassed, or guilty about losing family money, yet by not talking about it they are protecting the scammers and helping these criminals avoid being caught.”

Scam victim Michael Browne agrees. The self-employed builder from Christchurch lost $330,000 in an investment scam in which he’d been told to sign a non-disclosure agreement.

“They swear you to secrecy, and that’s the problem,” says Browne. “If I’d told someone what was happening I could have been made aware that I was being tricked.”

It was only after Browne eventually talked to an employee at his bank that the scam became apparent.

“The bank officer was great – she asked me if I knew where my money was really going, told me I was being scammed and that I should go to the police. The blinkers fell off and I realised she was right.”

Browne never got his money back – it disappeared overseas – including $150,000 he borrowed from his mother. The CFFC has been supporting him and he is speaking out to support its message of the need to talk about money matters with family and trusted advisors, including offers that seem too good to be true, and requests for money from people you’ve never met.

Groot maintains that blame for scams should shift from the victims to the offenders, who use sophisticated tactics and technology to trap people from all walks of life.

“There’s a new investment scam doing the rounds that asks targets to sign a confidentiality clause, requiring them to not discuss the deal with third parties such as banks or financial advisors. Scammers will also use fear tactics such as threatening victims with prosecution for divulging details of a deal.”

Scams take many different forms, and Groot says any request for money should be seen as a warning sign.

“Find someone you feel you can talk to about the situation. Sometimes just putting it into words, or getting another person’s point of view, will help you see that it’s a scam. And it might help law enforcement to catch them before they make someone else a victim.”

CFFC’s Little Black Book of Scams has information on how to recognise and avoid scams, and what to do if you’ve fallen victim.

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