The Commission is reminding New Zealand small businesses to remain vigilant about avoiding scams as it supports Fraud Awareness Week, which runs until Saturday.
The Commission is reminding New Zealand small businesses to remain vigilant about avoiding scams as it supports Fraud Awareness Week, which runs until Saturday.
Scams are increasing globally and the international week aims to raise awareness of the dangers of scams and to inform consumers and small businesses about how they can protect themselves.
General Manager of Competition, Kate Morrison says that as part of the week, the Commission is launching a scams webpage to provide information about the scams (or potential scams) it has investigated and offer some general advice on how to avoid them.
“Scammers are always coming up with new and sophisticated methods to trick consumers into handing over their money or personal information – especially with today’s technology. We know that small businesses have been a particular focus of scams, so we are pleased to support that theme this year.”
“Our scams webpage is an additional resource for consumers and small businesses to find information to assist them in protecting themselves from scams.”
In recent months the Commission has published media releases warning of three traders which targeted New Zealand small businesses. Corporate Portal New Zealand and Global Map Index both sent unsolicited mail asking businesses to urgently update their company details for their online business directories. In both cases, businesses reported being misled into signing up to an expensive contract when they were under the impression that updating their company details for the directory was free.
The third case was when the Commission received over 100 complaints about New Zealand Small Business Assistance Centre. Businesses complained of paying for information about grants when they weren’t eligible for them and that the information they received was already freely available from other government departments.
Nationally, small businesses are also a growing target for scams. NetSafe have said the number of New Zealand small business incidents have tripled compared with the 140 they received last year. In 2014, 35 victims lost $788,253 to scams, giving an average incident loss of $22,521.
Ms Morrison says the Commerce Commission has seen its own increase in scam related complaints with 88 last year, compared with 50 the year before.
“There are lots of devastating stories of people losing money to scams. Many of these scams originate from overseas which makes it almost impossible to recover the money and much harder for agencies to disrupt.”
“That’s why raising awareness of scams and how to avoid them is important. We advise people to not be lured into an overly attractive offer before checking that it is genuine. If in doubt, just say no and don’t be rushed into making a decision,” Ms Morrison said.
In New Zealand there is an Interagency Fraud Working Group initiative, supported by the Ministry of Business, Innovation and Employment (MBIE), Commerce Commission, Financial Markets Authority (FMA), Department of Prime Minister and Cabinet (DPMC), Netsafe, and Department of Internal Affairs (DIA). Find out more about Fraud Awareness Week.
The major scams targeting small businesses in the last year include:
Business email compromise – the interception of small business communications over email, usually resulting in suppliers sending false invoices requesting payment to alternative bank accounts or customers being sent similar faked invoices.
Ransomware – the infection of small business systems with the resulting impact on business continuity and frequent need to pay a Bitcoin ransom due to poor or non-existent backups.
Spear phishing – the creation of targeted emails requesting the payment/bank transfer of company funds to offshore accounts (occasionally to New Zealand mules). We have seen this operation become more complex recently with the creation of almost duplicate domain names to increase the chance of success.
Invoice fraud – the sending of fake or dubious invoices to trick companies into renewing intellectual property registrations or enter online directories. The most significant issue this year has been the Corporate Portal scam which is now on its third mailing dump. Read more.
Funding scams – the most significant issue is the NZ Funding Grants website which has tricked many small firms into paying fees to find grants which they are not eligible for. Read more.
