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16 January 2023

Scam case study: Escaping a scammer with a little help from a friend

When Mia asked an old friend for some money to help top up an investment – she heard the harsh news: the whole thing was a scam. Targeted on social media, Mia has now lost $41,000 with little prospect of getting any of it back.

Image: Screenshots of real content shown to Mia as part of the scam which eventually cost her $41,000.

The simple act of talking to a close friend or family member can lift the veil on a scam and help free us from being ripped off.

For young Auckland mum Mia*, opening up to a friend about an investment offer that began on social media eventually led to the awful realisation that she’d been the victim of a persistent, and particularly nasty scam – which lost her $41,000.

It all started when Mia received a direct message on Instagram from someone claiming to be called ‘Becky’ – asking if she’d be interested in turning £30,000 to £75,000.

“The rich keep getting richer because the poor think an opportunity is a scam,” said Becky in one Instagram post.  “DM today for a serious business and start your journey - yeah.”  “Join the program and start earning now.”

Details of the exact investment were vague, but “Becky” was persistent in contacting Mia and said she was trying to help young mums.

Becky asked for communication to move onto the WhatsApp messaging platform.  This is a tactic often used by scammers, as it allows them to keep their fake social media profile from being blocked once the scam is revealed.  They can easily set up new messaging profiles for the next scam.

Once Mia moved the conversation to WhatsApp, "Becky” started bombarding her with messages, mostly asking her to send money and asking personal questions such as where she worked. “Becky” said she was associated with well-known international trading banks, including the Bank of America and could help Mia make big investment returns.

Red flags to watch out for

  • Approaches via social media – Mia wasn’t looking for investments, but was essentially ‘cold called’ on the Instagram app
  • The actual details of the investment are kept vague.
  • Promises of unlikely, big returns.
  • A request to use non-traditional methods of payment, such as money transfer services rather than bank accounts.
  • Being asked to lie to a bank or money transfer provider about the payment.
  • A request to move on to another communication platform – in this case to WhatsApp.
  • The scammer asks you to keep the investment a secret.
  • All communication conducted by direct messaging – Mia never actually spoke to the person who claimed to be named Becky.

Mia went on to transfer money into an account Becky provided details for, but Mia’s bank refused to make the transfer request, warning it was likely an investment scam. Undeterred, Becky then asked Mia to instead send money through one of the big money transfer companies.

If challenged by staff, Mia was to say she was sending money to a family member overseas, said Becky. She was not to mention anything about the ‘investment opportunity’ she thought she was pursuing.

After transferring funds, the scammer told the Mia she had already made a substantial return on the initial investment.  Further requests and more insistent demands were made for Mia to transfer more money, so that more ‘profits’ could be realised.

The scammer became more threatening and aggressive when Mia questioned her motives and threatened to report Mia to Inland Revenue Department if she didn’t keep transferring money.

Things kept getting worse for Mia, who took out personal loans to continue making payments. The scammer coached her to say the loans were needed for a car, or curtains for her home, and later even suggested Mia steal money to help prop up her “investments”.

Despite the money she’d already paid, the pressure came on Mia to come up with even more money if she wanted her investment paid out.  It was then that Mia reached out to an old friend, calling her and asking for $30,000 to pay into the ‘investment’.  Her friend smelled a rat and told Mia that she might be the victim of a scam – and it was time to go straight to the police.

After telling the police, notifying the FMA and cutting off all contact with the scammer, Mia is now $41,000 out of pocket, sadly with no prospect of getting her money back. She’s also had to get a new drivers’ license after earlier sending a photo to “Becky”.

We still don’t – and probably never will – know for sure who “Becky” really was or even where they lived. But we do know that she manipulated and tricked a young mum who deserved better.

Tips to avoid being scammed

  • Tell friends and family if you’re considering a new or unusual investment. They may have a useful perspective and see it a bit differently. They haven’t been influenced by the same tricks and allure of quick wealth that you’ve been subjected to.
  • Listen to your bank. Mia’s initial payment was refused by her bank, which suspected it was a scam. Banks see fraud and scams every day, and their systems often alert them when something looks fishy.
  • A legitimate investment company should allow easy bank transfers – why would they try to make it more difficult for customers by directing you to use expensive money transfer services?
  • Stop all contact with a scammer once you get suspicious – no calls, no messages. Every piece of information you give out can be useful to them. Block them on all channels!
  • And watch out for ‘recovery scams’ – when another scammer (or even the same one) offers to help you recover your stolen money. They victimise the person again by asking for a fee to help get their money back.

Read more

Who to contact

  • Contact the FMA if the scam relates to an illegal investment offer or scheme. Please ensure you include your contact details so that we can be in touch.
  • Consumer Protection’s Scamwatch 
  • Department of Internal Affairs lists a range of scams by format, e.g., email, text message, phone, fax and postal scams. You can report scams to them, including forwarding text message scams to the free shortcode 7726 (SPAM).

*Name changed to protect privacy.

 

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