Fighting Scams and Fraud One Tip at a Time!
It’s been a rather despondent week for many kiwis as Auckland moves into Level 3 restrictions, while the rest of the country enters Level 2 restrictions. However, let’s not lose hope, as Dr. Ashley Bloomfield said: “The virus is the problem. People are the solution.”
New Zealand has rid this virus before, and I’m hopeful we’ll do it again. We hope you and your whānau are staying safe and well, and this includes looking out for your financial wellbeing.
Many economists are still trying to make sense of what will happen to our economy, and many of us ponder the potential consequences on our financial fitness. It is because we now live in such unprecedented times, we can at times be vulnerable to scams and fraud; be it through coercion, emotional manipulation or sometimes, desperate to make a quick buck.
To build your resilience and to ensure that you safeguard your crypto assets, our team at Easy Crypto has put together educational content to help you recognise the ‘red flags’ of scams. We have looked at the information communicated by the NZ Police, Finance Markets Authority and Commission for Financial Capability, and summarised a three-part mini series on the common types of scams circulating in New Zealand.
Scams come in all forms, even in the most unlikely events or circumstances. In 2019, Kiwis lose an estimated 23 million New Zealand dollars to online scams. This article will give you the quick facts on ‘how to recognise a scam’ and ‘what to do’. Some of these scams may or may not be directly related to cryptocurrencies, and can also be applicable when looking out for your wider savings and investments.
Common scams: An overview
What is a scam?
A dishonest scheme
What is a fraud?
A wrongful or criminal deception.
Be it a scam, or a fraud, there is usually an intended to result in YOUR financial or personal loss. And such losses are almost, always, unrecoverable.
There are many ways people try to scam you out of your money. The scams might be online — through email, the internet and social media — or the scammers might interact with you in person, such as coming to your door, calling or texting you.
Common scams include:
- Phishing (pronounced like fishing, just that you’re the ‘fish’ if you respond/get hooked) — an email or text that tries to trick you into providing your personal details such as date of birth, bank details, address etc.
Why would someone do so? With your details, they may try to hack your accounts. Please read our guide on how to store your crypto assets securely.
- Investment scams — this is where you are offered the chance of high returns for very little risk inheritance or lottery and competition scams.
Some call it “be in to win the golden ticket”. In scams 101, you will be told that you’ve inherited or won money, but you need to pay a fee or taxes before you can get your winnings.
However, when it comes to crypto assets, you may see an email, Youtube video, a tweet, Facebook post or messages, about how you could deposit your crypto assets with the potential to earn higher returns. Most of the time, these scams impersonate reputable figures and offer a “free reward” event.
- Multi-Level-Marketing or Trading scams — alright, these are like investment scams, but the 2.0 ‘improved version’.
You are typically invited to join a group or may have stumbled upon comments on Youtube about how this guru made five times the earnings or that someone is part of this syndicate where they pool their money together to make higher earnings.
These scams typically involve you joining a ‘closed group’ on Facebook or a Telegram chat group. Please do your due diligence, no one can guarantee your investment returns, not even your bank on your KiwiSaver!
- Phone scams — someone calls pretending to be from a government department (e.g Inland Revenue Department), your bank, or a well-known company, and asks for your personal information. The purpose of doing this is similar to the Phishing scam where they attempt to gather your financial information.
- Computer virus scams — this is where you get a phone call saying your computer has been infected with a virus.
Typically, the caller will claim that they can fix your computer as long as you give them you provide them with remote access to your computer.
In classic scams, they may ask for your credit card details. However, when it comes to crypto assets, the person may ‘crypto jack’ your computer, this is where they make you download some kind of computer script and they are able to use your computer and internet to mine cryptocurrencies.
- Online dating scams — where a person you’ve only met online and have become romantically attached to starts asking for fiat money to be wired to them or cryptocurrencies to be sent to them.
Alright, among all of the scams, this is probably one of the hardest to recognise since emotions are involved. If you think you’re a target of this, speak to your bank or report it to Netsafe.
Netsafe’s Freephone: 0508 638 723 (NZ only)
- Money mule — such scams are usually involved in conjunction with other scams such as investment or romance scams. The scammer will send you a sum of money or cryptocurrencies, and tell you to send the rest onto them. Of course, what they do not tell you is that these funds are usually stolen or not legitimate. In such scenarios, you become the ‘mule’.
In the upcoming articles over the following weeks, we hope to go into each scam type and provide you with case studies scenarios so that you can better recognise these signs.
Protect your crypto assets: Quick tips to keep in mind
Learn to spot signs when something is ‘not quite right’.
They asked you to transfer cryptocurrencies or fiat money to them
Many scams involve a request to wire money electronically using a money transfer service, like MoneyGram, Western Union, or using cryptocurrencies. Remember that sending a transfer through these services is like sending cash— once the amount is sent, it’s almost IMPOSSIBLE to get your money back.
Be skeptical of emails, messages or websites that contain mis-spelled common words; grammar errors that make it difficult to read or expressions that are used incorrectly. Email and web addresses should also be examined closely to see if there are subtle mistakes or differences.
Scammers may ask you to provide personal or financial information than is required for the transaction or discussion. Be SUSPICIOUS if someone asks for copies of your passport, driver’s licence or birth date. You can never be OVERLY careful.
Your bank or government department, and even us at Easy Crypto, will not send you an unsolicited email asking you for your personal or financial information. Please be vigilant as scammers at times use email similar to established institutions or businesses.
Unsolicited friend request on social media
DO NOT accept friend requests from people you do not know until you review their profile or ask your real-life friends if they know them. Does their profile look fairly empty or have posts that are very generic? Do they seem to be promising more than friendship?
These are some (serious) red flags that point to a scam. Delete that request and block future ones.
Similarly, be mindful about unsolicited phone calls. These days technology even allows people to display numbers that may not necessarily be theirs. There is no harm in hanging up. If you are concerned, you can always search for the entity they claim to be (e.g. the bank) can call the main line instead. If it is a company you’ve never heard about before, then don’t even worry about calling them back.
When it’s just TOO GOOD TO BE TRUE
Everybody loves a great deal. But shocking offers, or unreal returns may signal that the offer is not quite what it seems!
What to do if you have been scammed
If you think or know that you have been scammed, report it to your bank and to NetSafe’s website.
Freephone: 0508 638 723 (NZ only)
NetSafe will get back to you with advice and may also pass your report to another agency, such as the police or Consumer Protection.
You can also report a cyber security issue through CERT NZ.
We hope the quick tips provided in this article will help make you a more resilient crypto assets investor. Write to me: [email protected] if there is something you would like us to write about. Until next time. Kia kaha!