North business loses $8k in online scam | Northland News | Local News in Northland

Police are warning businesses that sell online to beware of a sophisticated international scam involving fraudulent credit cards and a bogus freight company after a Whangarei company was scammed of $8000.

Whangarei police Detective Pete Hayes said the scam duped business owners into paying bogus shipping costs and was a threat to any business trading online.

In the Northland case, a Whangarei business had a customer wanting its product shipped to Japan.

The customer had emailed giving details of a preferred freight company called Postex Air Express, which, unknown to the Whangarei business, was a bogus firm, supposedly based in London. Freight charges to have the product shipped overseas were added to the total cost.

Once the credit card payment appeared to have gone through and appeared on the Whangarei business' banking records the bogus freight company had emailed to say it could not take credit card payments and asked for the freight component of the bill to be paid in the form of a direct overseas cash transfer.

The bogus company - most likely to be the scammer - had then emailed the Whangarei business, quoting it US$650 ($790) for express shipment and US$500 for standard.

Mr Hayes said the Whangarei business paid freight, which was non-refundable. "Anyone in the retail business that deals with orders over the internet has to be aware. Some of the red flags that might be raised are the name Postex Air Express and if someone is asking for payment via a direct cash transfer through a credit union or similar," Mr Hayes said.

In the Northland case, once the first transaction had worked, the person had then claimed his mates wanted to make an order for the products. During the next month the Whangarei company made five payments totalling $8000 for orders to Japan and England.

The company's bank had then notified it of a possible scam and advised the card that had been used was fraudulent. The bank refused to cover the cost of the cash lost in the fraud. Mr Hayes said if there was nothing to link those involved in the scam to New Zealand there was little police could do. He recommended business owners check websites run by Consumer and Internal Affairs.

Banking Ombudsman Deborah Battell said if a business or person in charge authorised a payment and it turned out to be a scam, there was no obligation on the bank to pay the costs instead.

"We have been involved in investigating [similar] cases where [the amount scammed] was $100,000 or more. It's fortunate this scam was discovered or it could have cost the business far more," Ms Battell said.