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IPCA calls for ‘fundamental overhaul’ of fraud investigation processes

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Fraud and deception based crime costs victims around $20-30 million in total each year. File photo.
Photo: 123rf

The Independent Police Conduct Authority has found major failings in the way police are responding to the growing number of fraud complaints.

The IPCA says police need a “fundamental overhaul” of their processes for how they investigate and record fraud, or risk undermining the public’s trust.

Latest crime statistics show more people are victims of fraud or deception than any other crime.

Last year 318,000 people reported being victims, which makes up for about eight percent of all adults in New Zealand.

Fraud and deception costs victims around $20-30 million in total each year.

Financial Services Complaints chief executive Susan Taylor said it was a growing and devastating issue across the country.

“They are very distressed, because in some cases they’ve lost a few thousand dollars – which to that person, that is a lot of money. We’ve seen forwards to $50,000 and $100,000 in some cases,” Taylor said.

But police have not taken the issue as seriously as they need to, according to the IPCA.

The watchdog received more than 50 complaints concerning handling of fraud cases, and found police were falling short across the board.

The report said police were not prioritising investigations, had inadequate training and a lack of victim focus.

Data suggested that around 70 fraud offences were brought to police each day, but only 60 were correctly recorded in their system.

Even then, the crimes were being downgraded to civil disputes or minor offences.

Indepent Police Conduct Authority (IPCA) chair Judge Colin Doherty

IPCA chair, Judge Colin Doherty. File photo.
Photo: RNZ / Cole Eastham-Farrelly

IPCA chairperson Judge Colin Doherty said there were many reasons fraud was underreported, and police were adding to that

“Many people [are] thinking that it’s not worth complaining about, some people are embarrassed at being scammed, or a whole host of reasons,” Doherty said.

“But we think one of those is that people are of the view that complaining to the police doesn’t help or doesn’t bring action.”

In one example, a caravan sales scammer banked $150,000 from several different victims.

Nineteen complaints were made to police, several of which were considered a civil matter, two weren’t recorded in the police database and only one resulted in prosecution for the scammer.

A private investigator dedicated hours of work on the case against the scammer, and it was even featured on current affairs show Fair Go.

“Despite this, and our continued attempts to have police link and investigate this offending, their position continues to be that the reports made are civil, lacking the evidence to prove the required criminal intent,” the report read.

Labour MP Chris Hipkins

Police Minister Chris Hipkins said proactive work was needed to prevent fraud. File photo.
Photo: RNZ / Angus Dreaver

Police Minister Chris Hipkins had not had a chance to read the report, but said complacency was an issue.

“Fraud’s an area I think we need to take more seriously as a country, and police I think acknowledge that as well,” he said.

The minister said he trusted police would take the IPCA recommendations on the chin, and that proactive work needed to be done to prevent people falling victim to fraud.

The IPCA wanted a ‘fundamental’ overhaul of the processes for recording and investigating fraud.

Some of its specific recommendations were for police to:

  • Monitor and understand the extent of fraud
  • Implement effective training for front counter and call centre staff who receive, identify and record fraud reports
  • Establish dedicated regional fraud units, with a national manager, to triage and where appropriate investigate fraud complaints
  • Implement nationally consistent recording and investigation processes
  • Enhance support for victims of fraud

NetSafe Chief Executive Brent Carey said the private and public sectors had a role to play alongside police.

“We need to be joining up the dots are getting clearer on the scale of this fraud problem, we have to identify common patterns and share intel – and mostly we have to make sure there is no wrong door for people,” he said.

Carey suggested a national anti-scam centre, which has been proposed in Australia, could take the load off police.

Police will consider the recommendations from the IPCA, and has also been undergoing an internal review of its processes for improvement.

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