Police stretched by online fraud

Fraudsters have targeted online auction site TradeMe in a surge of internet crime.

The police identity intelligence unit manager, Detective Senior Sergeant Neil Hallett, who also deals with e-crime, said internet fraud was increasing, and police were "challenged" by the trend.

"It's all changing and police are having to adapt," he said.

"New Zealand police will evolve and develop the expertise to combat it."

Police had no idea how widespread the problem of internet fraud was because it had emerged only in the past 18 months, Mr Hallett said.

One of the biggest internet fraudsters caught so far, 19-year-old Dimtri Nemkine, pleaded guilty in Auckland District Court in April to 10 fraud charges that involved hacking into bank accounts and using funds to buy $35,000 worth of jewellery, computers, cellphones and computer games on TradeMe between last December and February.

This year, Canterbury book thief Lee John Simpson was sentenced to 5 1/2 years in prison for the theft and selling of precious volumes on the internet.

And last month TradeMe banned three people for selling reproductions of other people's photographs as original paintings.

Mr Hallett said internet fraud ranged from people who sold items on TradeMe and failed to deliver to sophisticated hackers such as Nemkine.

A million people - one in four people - are registered users of the TradeMe site.

The expansion of internet trading sites had given scammers new targets, Mr Hallett said.

"Fraudsters will be attracted to anything where there's a chance to make a quick buck," he said.

"People think they are quite anonymous on the net, but what they forget is that they leave pretty big footsteps."

Mr Hallett said a police unit focusing on e-crime and identity theft was established nearly a year ago. He would not say how many officers worked for the unit.

Detective Constable Tim Traviss, who headed the Auckland fraud squad's Nemkine investigation, said about 10 per cent of all fraud now involved computers.

This type of fraud had been almost non-existent two years ago, he said. "It's becoming more and more prevalent."

Another policeman, who did not want to be named, said police were increasingly involved in fraud investigations where people had been ripped off over the internet.

"It's easier for small-time crooks to commit fraud now because they don't even have to leave home," he said.

"In the old days, you had to present a stolen cheque over the counter at a shop or a bank. Nowadays, they can sit at home and create new identities and have access to far more victims than they ever had."

The policeman, who is involved in fraud investigation, said members of the public using internet trading sites were more vulnerable now because of the technology.

"People are willing to send their money at the chance of what they see as a bargain," he said.

The most common form of internet fraud was when someone collected money for an item sold on TradeMe but never delivered the product. The fraudster would then change his TradeMe login and email address to avoid detection or being identified as a "bad trader", the policeman said.

Aucklander Forrest Tan was one of Nemkine's 16 victims. He said he felt really angry when he learned the money he received for a laptop sold on TradeMe was stolen by a hacker.

When the bank account owner found funds missing, the money was debited from Mr Tan's account by the bank.

Mr Tan's computer was recovered when Nemkine was arrested. He said he would use TradeMe again, but is now more cautious.

TradeMe business manager Michael O'Donnell said the website had many features to protect customers from fraudsters.

One such system was Safe Trader, where people could deposit money for goods with TradeMe. The funds would be released once the product had been delivered in satisfactory condition.

Feedback about which traders were honest was also available on the site, Mr O'Donnell said.

TradeMe tried to verify sellers' identities by sending a letter to their address, which required the seller to return it, he said.

TradeMe also had an investigation team that collected information for police prosecution of scammers using the site.

- NZPA