New Zealand digital scams cost exceed NZD $2.3 billion

A report by Netsafe and the Global Anti-Scam Alliance (GASA) reveals that digital scams have cost New Zealanders over NZD $2.3 billion in 2024, equivalent to 0.6% of the nation's GDP.

The "State of Scams in New Zealand 2024" report indicates that online shopping scams have become the most common type, overtaking identity fraud. Despite half of New Zealanders encountering more scams over the last year, there has been a decline in the reporting of such incidents to law enforcement.

According to the report, there was a 9% drop in scam reporting compared to last year. This reduction is attributed to the lack of clarity on where to report scams and doubts about the efficacy of such reports. Additionally, while 47% of Kiwis are unsure if artificial intelligence was used in scams against them, the general awareness of AI's potential role in scams is high.

Netsafe CEO Brent Carey highlighted the issue of underreporting, stressing its impact on victim support and the unchecked operation of scammers. "Only 17% of scam victims managed to recover their losses, while 43% attempted but failed to retrieve funds, and 23% didn't try at all," Carey stated. "We need to reverse this downward trend in reporting and recovery and encourage a community-wide response to make New Zealand safer from these online predatory behaviours."

Carey added that these statistics underscore the necessity to restore public trust and improve accessibility to support for scam victims. "Scams aren't just unfortunate mistakes; they are sophisticated high-tech crimes that require action," he said.

The report outlines key findings, noting that financial losses from scams have increased to over NZD $2.3 billion this year from NZD $2.1 billion in 2023. Nearly 18% of New Zealanders have been directly affected by scams, with 62% facing scam attempts at least monthly. Mobile apps and social media have become major targets, with platforms like Gmail and Facebook often used for scam attempts.

Investment scams, including fake cryptocurrency and quick-profit offers, account for 72% of the total losses. Online shopping and identity theft scams also cause significant financial and emotional damage.

Netsafe is calling for government backing to establish an independent, broad-based Anti-Scam Centre. This would coalesce efforts from private, public, and non-governmental sectors to address the threat of scams more effectively. An Anti-Scam Centre is considered crucial as scams increasingly affect more New Zealanders.

To enhance support for victims, Netsafe advises law enforcement and banks to adopt a 'victim-first' asset recovery practice. This would include transparent communication on recovery efforts, dedicated assistance for navigating the claims process, and prompt distribution of recovered funds.

Carey explained, "By making asset recovery victim-centric, we take a firm stance against scammers and give Kiwis confidence that reporting scams leads to real financial justice. With dedicated recovery processes, we can offer victims a clear path to reclaiming what's been lost, restoring trust and resilience in our communities."

The findings also indicate the need for increased awareness regarding AI-driven scams. Recognising threats such as deepfakes and AI-generated deception is key to protecting individuals.

Netsafe provides a range of resources to help New Zealanders guard against scams, including scam alerts, safety tips, and tools for verifying suspicious online links. Resources are accessible via their website to aid in recognising, reporting, and preventing scams.