Modern communications technology is a marvel – we use it every day often without thinking - we chat, make friends and play games with all kinds of people from across the globe.
But it’s these same communication channels that crooks use to lure people into their web of fraud.
One New Zealand woman who found out the darker side of global connectivity was tricked via a contact met playing online scrabble and ended up losing $100,000 in a bogus cryptocurrency investment.
Luni, who has lived and worked overseas, enjoyed playing Scrabble Go, meeting new friends from across the world, including visiting some new international friends in person that she had met via the game.
“We live in a globalised world, this is how we communicate – I have met a lot of wonderful people internationally and this seemed no different.”
“But in hindsight, I was probably a bit naive, I let my guard down and broke my own rules.”
“It started innocently enough- ‘where are you from? What’s your job – would you like to chat on WhatsApp? - I thought I’d learn a little bit more about the person, just like a previous friend I’d met and had visited and still keep in touch and will visit again.”
“It was all pretty harmless, very slow to be honest - he said he worked on an oil rig, which I know should have set off alarm bells – but people do actually work on oil rigs – I had known a family, in another New Zealand town, the father, a middle-class tradie Kiwi, worked on oil rigs overseas. Also, I have a good friend, whose brother has spent his whole working life on oil rigs, all around the world. It’s not impossible.”
“Then we chatted for about a month. He sent an odd photo of scenery, and of himself, (later discovered through reverse imaging, photos from someone's Facebook profile) and then he asked if I was, interested in Bitcoin. I said no initially, but there had been a lot of conversation in the media, and internationally about Bitcoin. Trying to find information in 2021 was quite difficult –it took me 6 months before I decided to weaken and invest.”
Luni ended up losing approximately $NZ100,000 over the next 3 or 4 months, she had recently paid off a mortgage and had come into some money through inheritance and another investment.
The money was lost through a combination of fees being demanded and what eventually turns out to have been fake investments.
“Firstly, I admitted that I was stupid. I admit that I was too trusting. I do not know why I was so trusting. I cannot answer that question. It is so much unlike me. I have some theories. Normally I am very disciplined with my money and have set myself up moderately comfortably for the rest of my life. The timing of the scammer contacting me and me doing the action, correlated at the time of me receiving an inheritance.”
Unhappy with the service she had received from some established New Zealand investment firms and banks, Luni was open to trying something a bit different with her money.
“There was not a lot of discussion about scammers in 2021,” she said.
It was an interesting learning experience for her – first setting up a crypto wallet with Binance, then putting small amounts of money into it. Her new friend met through Scrabble Go “Brooks Williams” was helpful, offering advice and support, then suggesting she trade crypto on a platform called WiseFex. She kicked things off with just a $500 investment.
Read the FMA’s WiseFex warning
But when Luni tried to get some of her money out of the account - her crypto investments had been rising in value – the trading platform started putting up barriers, with requests for more money, fees and transactions payments all needed before she could get any of her funds out.
When these requests for thousands of dollars in fees were made, Luni told them she had no money – she was told to borrow from the bank, to ask friends and family for money.
At one stage she tried to withdraw $US50,000 from her WiseFex account but was asked to pay a $US2,500 fee first.
Then one day, the scammer friend advised to shift from WiseFex (recently rebranded as Reliantassetsltd) directed Luni to ‘Coins Archive.” Now the alarm bells rang loud and clear – WiseFex was a scam platform that was running an ‘advance fee’ scam, wherever increasing demands for fees, taxes and charges are made before money can be withdrawn.
And of course, Luni was being guided and helped into this world of crypto trading by her online friend Brooks. He’d done all this before he said – it was perfectly normal to pay these fees, here’s how it all works – he was a supportive and helpful friend who’d been able to navigate the fees and complexity before, helping Luni along the way.
Of course, as now seems clear, the person posing as her friend “Brooks” was part of the WiseFex and CoinsArchive scam, priming, coaching and conditioning Luni to keep putting more of her money into the platform.
“I thought I was pretty smart, I’ve lived frugally, and invested widely, but I broke my own rules. I still don’t know why, it puzzles me”
During her time spent living overseas, she was familiar with deals where fees were paid upfront – often demanded before service. While not as common in New Zealand, she wasn’t put off by the initial demands for a fee before she could withdraw money from the crypto trading platform.
There’s not one piece of advice that can save people like Luni and all of us from falling into a scam – these criminals are experienced and sophisticated, and can often taking a long time to gain your trust.
