In its Global Financial Fraud assessment that was released in March 2024, the International Criminal Police Organisation (INTERPOL) revealed that financial fraud is on the rise around the world, with cybercriminals taking advantage of advanced technologies that are being adopted by the general public.
More frequently, pig-butchering scams – in reference to the notion of fattening up a pig in preparation for slaughter – are employed to deceive victims by gaining their trust in order to steal from them.
Scammers who are usually part of organised crime networks often target vulnerabilities in human relationships and involve cryptocurrencies, making their activities harder to trace by law enforcement agencies.
“The use of Artificial Intelligence (AI), large language models and cryptocurrencies combined with phishing- and ransomware-as-a-service business models have resulted in more sophisticated and professional fraud campaigns without the need for advanced technical skills, and at relatively little cost,” the report explained.
It is a reminder of how fraud has grown from being an isolated case – the earliest record being the case of Hegestratos in 300 BC – to a widespread concern across numerous digital avenues. From email phishing and mobile phone scams in the 80s and 90s to AI scams in recent years, people find themselves susceptible to online fraud tactics utilised to the fullest by fraudsters.
The aforementioned report by INTERPOL cited investment fraud, advance payment fraud, romance fraud and business email compromise as some of the leading global financial fraud trends.
Of greater concern, the Global Anti-Scam Alliance has found through its Global State of Scams study that over $1 trillion has been lost to scams in 2023, with 78 per cent of study participants experienced at least one scam within that year.
There are several reasons why people end up falling for online fraud. Experts from UNSW Sydney notes that they might be financially desperate, clouding their judgement and rendering themselves vulnerable to schemes that promise easy money or high returns.
They might also be duped by scammers who are able to create personalised scams based on information gathered through social media and other sources; exploit emotional triggers such as urgency, fear or excitement leading to impulsive decisions; and pose as trusted figures or authorities to obtain personal information or conduct financial transactions.
Some can also fall victim to fraudulent schemes when their fail to notice warning signs or suspicious behaviour while leading busy lifestyles and are constantly being distracted. Others might simply be unaware of the existence of different kinds of scams to begin with.
It is worth noting that online fraud can happen to anyone, irrespective of age, education or background. A 2022 study by the Institute for the Public Understanding of Risk in Singapore discovered that digital natives in the country, specifically under the age of 25, are more susceptible than those aged 65 years and above.
This is most likely due to their familiarity and reliance on digital platforms for daily activities. Driven by their curiosity and their tendency to take risks, and compounded by the belief of their invulnerability against harm or misfortune, they unwittingly increase their exposure to possibly irreversible consequences.
So what can be done to avoid becoming victims of online fraud? A crucial precautionary step is to make a change in mindset. Instead of thinking that “there is no way this can happen to me”, consider the probability that it could, i.e. “this can happen to me, and so I must be careful about it.”
From there, always stay informed about scams in their various forms and tactics, emerging fraudulent schemes, and technologies used by cybercriminals.
If one ever encounters adverts and posts containing claims or promises that appear too good to be true, be sceptical of its legitimacy.
The same applies to emails from unknown senders that might ask for personal or financial information. In this case, they can be scrutinised by identifying spelling errors, suspicious links as well as email addresses that do not correspond with sources they claim to come from.
When disclosing sensitive information over the phone or online, exercise caution and provide them only to reliable and vetted sources. Especially online, enable multi-factor authentication for accounts that support it, change passwords frequently, and verify websites before entering login details.
Most importantly, be careful when making financial decisions. For instance, take the time to learn and understand unfamiliar investments by seeking professional advice, or ensure that online shopping websites utilise accredited merchant services for payment.
Reference:
5 of the most remarkable instances in the history of fraud. (2015, September). Experian UK. https://www.experian.co.uk/blogs/latest-thinking/fraud-prevention/5-of-the-most-remarkable-instances-in-the-history-of-fraud/
About GASA The Global Anti-Scam Alliance. (n.d.). Global Anti Scam Alliance (GASA). https://www.gasa.org/about
Feingold, S., & Wood, J. (2024, April 10). ‘Pig-butchering’ scams on the rise as technology amplifies financial fraud, Interpol warns. World Economic Forum. https://www.weforum.org/agenda/2024/04/interpol-financial-fraud-scams-cybercrime/
Ng, J., & Ng, R. (2022, December 15). As scams get more sophisticated, young and digitally savvy individuals are more likely to fall prey. Institute for the Public Understanding of Risk. https://ipur.nus.edu.sg/insights-commentarie/as-scams-get-more-sophisticated-young-and-digitally-savvy-individuals-are-more-likely-to-fall-prey/
Strandell, J. (2024, June 5). The evolution of online scams. Besedo. https://besedo.com/blog/the-evolution-of-online-scams-moderation-methods/
Ticha, V. (2023, September 20). Cracking the code: why people fall for scams. UNSW Sites. https://www.unsw.edu.au/newsroom/news/2023/09/cracking-the-code–why-people-fall-for-scams
