Criminologist urges tougher rules on scams after NZD $1.6bn losses

A criminologist and financial crime specialist has called for greater regulation of social media and telco companies in New Zealand to address the risk of organised cyber crime syndicates targeting the country.

Rising threat

The warning comes ahead of the New Zealand Police Financial Intelligence Unit's 2025 Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Conference, where Gabby Lewis will be a keynote speaker. Lewis is a criminologist who heads Fraud and Financial Crime at Australasian digital assets exchange Swyftx. She contends that cyber fraud networks have developed into complex organised crime operations, generating significant illicit profits and increasingly ensnaring New Zealanders as victims.

According to Lewis, transnational criminal groups have set up extensive scam operations in South East Asia, particularly in the Philippines. She said, "There are now around 400 scam compounds in the Philippines alone, each designed to look like legitimate tech firms but powered by trafficked workers forced to defraud people online. These syndicates are the new engine rooms of global organised crime, funnelling stolen money into terrorism, child exploitation and other criminal enterprises."

Government data estimates New Zealanders lost NZD $1.6 billion to online threats in the past year. More than 830,000 people experienced financial losses through online scams, at an average cost of NZD $1,260 per attack. Most of the affected individuals, 88 percent, reported the impacts as moderate, significant or severe.

Lewis highlighted the emotional and psychological toll left by such scams, extending far beyond financial losses. She said, "The human cost of scams is often devastating, with victims not only losing their savings but also experiencing emotional trauma and long-term financial insecurity. We regularly speak to people who have lost everything, their retirement funds, their homes, even their relationships. The shame and distress these crimes cause can be every bit as damaging as the financial loss itself."

Most scams, she said, target people through social media platforms. "The scams frequently begin on social media where fake investment and romance profiles lure victims into transferring money to accounts controlled by offshore syndicates. These scams start with deceptive ads on social media platforms like Facebook and Google. By the time they reach a digital assets exchange, the damage is already done," Lewis noted.

Calls for regulatory reform

"New Zealand must act before these syndicates shift their focus here. Waiting until scam volumes explode will be far too late," she says.

Lewis is urging the New Zealand Government to follow the regulatory approaches taken by Australia and the United Kingdom. Both nations have implemented or are introducing measures requiring banks, telecoms and social media companies to collaborate on detecting and blocking fraudulent activity and, in some cases, reimburse scam victims. She says frameworks in these countries establish minimum standards, mandate cross-industry protection, and share accountability for scam prevention.

Australia's new Scams Prevention Framework compels organisations in the banking, telco and social media sectors to share data, identify scams in real time, and could levy penalties up to AUD $50 million for non-compliance. Sector-specific instructions include verifying payees, blocking scam communications, and removing fraudulent advertisements from digital platforms.

Lewis said, "In Australia, social media platforms and telcos are going to be held accountable for vetting financial advertisers and removing fake investment ads." She also pointed to a decrease in scam-related losses in Australia since the heightened focus on prevention, stating, "Australians reported losses of around AUD $2.7 billion to scams in 2023, a 13 percent decrease on the previous year, following a period of heightened political focus on scam prevention."

Lewis cautioned against excessively lax victim reimbursement policies, as seen in elements of the United Kingdom model, arguing instead for a balanced approach "that protects consumers without removing personal responsibility."

Education and prevention

Lewis referenced a pilot programme run by Swyftx in Australia, where users who completed a short security awareness course and enabled two-factor authentication received a AUD $10 reward. The pilot found significant improvements in scam prevention: "The pilot showed participants were 62 percent less likely to fall victim to scams and 55 percent less likely to disable security protections afterwards. They were also 20 percent more likely to continue investing confidently on the platform, demonstrating how education and engagement can protect consumers while strengthening trust in financial systems."

She added that similar incentive-based educational models could be replicated within New Zealand's banking and telecom sectors. "Rewarding customers for learning about scams is not just socially responsible, it is commercially smart. When people understand how fraudsters operate, they make safer choices."

Lewis called for a comprehensive national public education campaign on cybersecurity and scam prevention, similar to public health initiatives seen in New Zealand in past decades. "Protecting consumers must also involve a government-led public education campaign similar in scale and impact to the iconic sun-safety initiatives that many of us have grown up with.

"We need a unified message that is simple, memorable and actionable, something like 'Slow Down. Look Around. Shut It Down'. If every Kiwi heard the same slogan from their bank, telco and digital exchange, the message would finally stick," she said.

Lewis plans to address these topics at the AML/CFT Conference in Wellington, advocating for increased cross-sector collaboration to limit the influence and prevalence of scam syndicates in New Zealand.