The cost of fraud

Nobody knows the total cost of fraud in New Zealand. While there are many fraud cases reported, experts say much is unreported. Victims are notoriously reluctant to stand up, for obvious reasons.

Some are embarrassed, some want to protect their professional reputation. And some blind optimists genuinely believe that a bank in Nigeria really will pay them $25 million one day.

In a well-publicised case late last year an anonymous Manawatu mother and son squandered more than $200,000 in a typical Nigerian scam. The 71-year-old woman lost her $70,000 retirement savings and her son went into debt to pay the "Central Bank of Nigeria". They also took out a reverse mortgage on their home. Payments included $10,000 to investigate the scam itself. The pair remained adamant that the offer was legitimate.

Experts say cases costing hundreds of thousands of dollars are reported a couple of times a month, and smaller cases are more common.

Police statistics show most reported fraud cases remain unsolved. Through the decade 1996-2005 the clearance rate hovered between 43 percent and 49 percent. Even if you report a fraud that is investigated, you're still unlikely to get your case solved and even less likely to get your money back.

That's why prevention is essential. Once you have let yourself be defrauded, it's probably too late. Don't let it happen.

Consumer is one of the best sources for fraud prevention advice. See Our advice.

Fraud Awareness Month

Fraud Awareness Month is an annual campaign, from the Australasian Consumer Fraud Taskforce, to raise awareness of scams and other mass-marketed consumer frauds.

The campaign's tagline is, "Scams target you, protect yourself" and this year's campaign is on steps consumers can take to reduce or eliminate their chances of becoming victims of scams.

The Australasian Consumer Fraud Taskforce is made up of 18 Australian and New Zealand government agencies. The local agencies are the Ministry of Consumer Affairs and the Commerce Commission.