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Investment scams: 'Like problem gambling combined with an abusive relationship'

The daughter of a retired civil engineer has spent 18 months trying to extricate her father from a series of overseas investment scams that have already cost him at least $160,000.

When Sarah’s father told her he’d invested $250 online, she immediately suspected it was a scam. Comments posted by other victims confirmed it: the company was dodgy, had cheated people out of their money, and wouldn’t give it back.

That was in December 2017. Since then, he’s gone on to hand over more than $160,000 in a string of transactions, from currency trading to buying bitcoin. At one stage, he lost $60,000 in a month.

A retired civil engineer with two university degrees, Sarah’s father is in his 80s and lives in a provincial North Island town. He appears to be the victim of multiple scams, but most of his dealings have been via an online account with Bulgarian-based Forex broker WiseBanc, which changed its name from PrimeCFD last year. The company’s flash website lists branches in Malaysia, Luxembourg and Russia, promising to pair investors with a personal mentor to “help you join the league of successful traders and change your life”.

Regulatory authorities in the UK and Ireland have issued warnings about WiseBanc and its parent company, Orion Service EOOD, and last December, an alert was posted in New Zealand by the Financial Markets Authority. Yet despite meeting with the bank, the police, his accountant and a fraud investigator, Sarah’s father still refuses to accept he’s been duped, writing off his losses as poor investment decisions.

The scammers bombard him in waves, going silent for a few months then phoning day and night. Some calls last for hours at a time. Once, in an act designed to show their goodwill, a lump sum of $2800 was deposited onto his credit card – a series of currency trades put his account into debit by the end of the week.

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Last year, he told Sarah they were “greymailing” him: pressing for quick payment before the opportunity to make a profit was lost. But just when she thinks the scammers have finally exposed their true intentions, he’s sucked right back in. “They just wear him down,” she says. “It’s like problem gambling combined with an abusive relationship: if they tell him to do something, he has to do it; it’s almost against his will.”

While her father has always dabbled in investing, Sarah says he’s naturally trusting and not technologically savvy. The scammers also seem to have caught him at a vulnerable time, first making contact not long after his partner died. While his home is ring-fenced by a family trust, he’s nearly drained his bank account. “If you tell him not to do something, it almost spurs him on. And he believes that if something is on a website, it’s real. He can’t get his head around the idea that the entire website might be fake.”

Sarah’s attempts to intervene have not only strained their relationship but been stymied at almost every turn. When she put a stop on his credit card, her father logged onto his online banking account and reactivated it. When she asked his telco company to block incoming international phone calls, she was told that couldn’t be done without his authority.

A year after she first raised concerns, the bank has finally removed his online access and cancelled his credit and debit cards. She’s also been advised to red-flag his credit rating so he can’t simply shift to another bank. Meanwhile, her father is furious at the family’s interference in his private affairs. Whether he’s driven by pride or embarrassment, Sarah can understand his need to retain a sense of control. “He’s probably feeling quite squeezed and that must be really stressful for him,” she says. “Part of me doesn’t want him to [face the reality that he’s been scammed]. I just want him to stop.

“You feel really powerless because these people are working across international borders and probably from countries where there’s not a lot of regulation, which means there’s so little anyone can do to get back at them. But you can’t just allow it to happen; they’re criminals who are stealing money through fraud – and who knows what that money is funding.

“It makes me cringe to think how much is being bled out of the country through scams. And each time, they get better at it and more sophisticated. Once they’ve talked to you for long enough, they can work out what motivates you and find the technique that will open your wallet.

“When I’m old, they’ll be scamming me – probably sooner than that, because it’ll eventually become so impossible to tell the difference between a legitimate organisation and a scammer.”

Names withheld on request.