Common Frauds

These are common forms of fraud that affect New Zealanders.

Advance Fee Fraud

In an advance fee fraud the victim pays money up front in return for goods and/or services which the fraudster never supplies. The money paid in advance is lost. The most common version of advance fee fraud is the Nigerian-type letter which continues to plague New Zealanders in the post and by email. These are best deleted and ignored.

See also advance fee fraud warning by the Serious Fraud Office.

Prime Bank Instrument Fraud

Prime bank instrument is a form of advance fee fraud. People are invited to take part in a secret market which is supposedly the domain of elite banks. People are offered instruments such as “prime bank notes” or “prime bank debentures” which they are told will bring very high returns. This market does not exist. Money sent to these schemes is lost.

See also Prime bank instruments and a Serious Fraud Office warning about prime bank instruments.

Affinity Fraud

Affinity fraudsters prey on people who trust each other, particularly members of religious, social, or cultural groups. They use the trust that exists within these groups to help steal money.

See more about affinity and other fraud in the How to Spot a Scam brochure at investor information and also how to avoid investment scams that target groups .

Ponzi Schemes

These are schemes where money from new investors is used to pay "interest" to earlier investors to give the illusion that the investment is successful. See more in How to Spot a Scam at investor information and also at www.sec.gov/answers/ponzi.htm

See more in How to Spot a Scam at investor information, Ponzi scams on the internet and also at www.sec.gov/answers/ponzi.htm.

Internet Fraud

Fraudsters are increasingly using the internet to dupe victims out of their money. For information on how to avoid internet scams see www.sec.gov/investor/pubs/cyberfraud.htm

For more information in how to avoid internet scams see Ponzi scams on the internet and fake websites.