Fraud is now the country’s most prevalent and fastest-growing crime type. Fraudsters claim hundreds of thousands of new victims every year, with many experiencing devastating impactson their financial security and mental health.
It now accounts for around 29% of all crimes committed, according to data from the latest New Zealand Crime and Victims Survey.
And we are not alone – it’s a global phenomenon.
Interpol warns that financial fraud already accounts for around 40-70% of crime in many member countries, and its Secretary-General Jurgen Stock publicly called out the “epidemic” earlier this year.
So what’s happening? In a world defined by relentless change, one thing remains constant: human nature.
We are witnessing a rapid rise in fraud not because people have suddenly become more unscrupulous, but because of what some might describe as a perfect storm of financial strain, workforce disruption, and tech-driven opportunities.
During economic downturns, financial pressures mount on individuals and organisations, creating both the motive and opportunity for fraud or corruption.
Studies show that redundancies, reduced income, and business failures often lead to a rise in fraudulent behaviour as people seek to alleviate financial strain. Role changes and staff turnover can lead to an increased risk of fraud slipping through the cracks.
When it comes to corporate fraud, rising insolvencies serve as a canary in the coal mine.
This trend is consistent across various economic downturns, highlighting the need for vigilance and robust fraud prevention measures during these periods.
The Serious Fraud Office was born out of the 1987 stock market crash that saw fraud uncovered on an unprecedented scale.
Karen Chang says the Serious Fraud Office was itself born out of the 1987 stock market crash. Photo / Nigel Marple, Picture Research: Chris Marriner
This cycle repeated during the 2008 global financial crisis, as marked by a series of finance company prosecutions brought by the SFO, involving widespread harm to ma and pa investors across the country.
Today’s economic conditions are similarly ripe for exploitation.
We are also witnessing emerging technologies and digital disruption that are enabling perpetrators to increase the sophistication, scale, and reach of their methods, making strong prevention efforts even more crucial.
Just this week, Netsafe spoke out about scammers posting fake liquidation sale ads on social media, using those companies’ misfortune to draw in more victims.
However, these circumstances can also create opportunities to identify, and take steps to prevent, fraudulent activity.
As we mark international Fraud Awareness Week, it’s clear that fraud prevention is more critical than ever.
A significant part of our prevention work involves collaboration with the public sector. Public sector agencies are the gatekeepers of public funds, and their vigilance is crucial in detecting fraud and corruption.
Maintaining integrity in the system is vital for upholding New Zealand’s reputation for low levels of fraud and corruption and for ensuring ongoing public trust and confidence in our institutions.
The SFO’s Counter Fraud Centre plays an essential role in helping these agencies harden their defences against fraud.
While the Counter Fraud Centre is primarily focused on the public sector, the lessons learned are valuable across all industries. The tools and resources we develop are freely available on our website and can help any business understand and implement their own fraud prevention measures.
Historically, New Zealand’s reputation for low fraud and corruption makes it a trusted place to do business.
By bringing these behaviours to light, we’re not only holding perpetrators accountable but also reinforcing New Zealand’s commitment to fairness and transparency.
In our line of work, we see up close the devastating effects of fraud on New Zealanders and their businesses – damage that can span lifetimes and even generations.
While white-collar crime may not leave physical scars, it would be a mistake to discount its impact on victims and the country’s economy.
