Naked sex chats help blackmail Kiwis out of $4.4m

Horny New Zealanders taking part in naked video chat sessions only to find their activities have been recorded are being blackmailed, as a new report shows Kiwis lost $4.4m last year due to internet scams.

According to findings from security website NetSafe, online users across the country have fallen victim to internet stings, with technological blackmail taking centre stage.

Reported for first time this year, the new scam places a technological spin on blackmail.

After taking part in naked web sessions, scammers are threatening to upload the footage to YouTube or share it on social networking sites unless money is paid.

NetSafe claims it has received reports of up to $600 being sent to blackmailers believed to be located as far afield as the Philippines and Morocco.

"It's a very difficult situation to find yourself in – we've had users afraid of friends and family seeing the videos or losing their jobs," says Martin Cocker, CEO, NetSafe.

"Once an initial sum has been sent through, the requests for more money keep coming."

Numbers published by Statistics New Zealand earlier this year showed that while more and more households are enjoying the benefits of going online, the number of people confirming that they'd been a victim of internet fraud has doubled since 2009.

"We continue to see a wide range of scams and frauds targeting Kiwis," Cocker says. "And many of these are well known phishing scams or spam emails which have been arriving in inboxes for over a decade."

Losses

Financial losses more than quadrupled year on year with 562 reports received where money was paid over to a scammer that was not recovered.

"We've seen a significant rise in report volumes and the impact of large scale losses this year," Cocker adds.

Last year alone, seven Kiwis reported losses of more than $100,000, with the average cyber incident more than doubling to $7,854.

"Over the last 12 months, almost $1.3m was reported lost to dating and romance fraud – this category of scam has previously shown the largest losses recorded over the last two years," Cocker says.

"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.

Bad sellers and blackmail over Skype

Investment scam losses, where New Zealanders are tricked into putting their savings into overseas companies promising high returns, totalled more than $370,000.

The largest number of reports though came under the online trading category – more than 350 people reported losing 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," Cocker says.

"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 have also suffered when buying goods from little known eCommerce websites where companies have taken money and not delivered.

This includes sites operating with a .co.nz domain name which are actually run from overseas. It pays to spend a few minutes researching any company you are thinking of buying from to see what other customers are saying.

Ransomware and hacked websites

Ransomware, where a security hole in your computer allows a cyber criminal to lock you out of your machine and demand payment, has been a common scourge for both home and small business internet users this year.

A fake warning from 'New Zealand Police' that you have downloaded copyrighted material or been looking at child pornography is designed to scare you into paying a $100 'fine'.

Advice

"Our advice to internet users remains simple: be suspicious of any unexpected emails that suggest you have won a large prize or that seek your help in transferring funds overseas," Cocker advises.

"We strongly encourage people not to send money by wire transfer in this situation unless they know the other party personally.

"Once sent, it's impossible to track or recover your funds.

Have you been scammed during the past 12 months? Tell us your experiences below