Posted on 7 May, 2021From complimentary face masks at the corner shop to trillion-dollar stimulus packages, the coronavirus pandemic has necessitated a rapid increase in expenditure at all levels of the global economy. But where money proliferates, so do efforts by criminals to siphon it off suggests an article published in the FT.
Since early last year, when the virus began its worldwide spread, there has been a growing volume of losses caused by increasingly sophisticated scams.
Analysis of billions of online transactions by cyber security company Trend Micro found that the start of the pandemic was marked by a significant rise in spam messages, malware attacks and phishing emails.
Spam messages multiplied 220 times between February and March 2020, according to the company, while malicious URLs — links leading to malware downloads or scams — increased 260 per cent.
Fraudsters are leveraging several aspects of the pandemic to trick victims. For instance, companies have paid for protective equipment and not received it, while individuals responding to texts supposedly offering vaccines or access to government loans have unwittingly revealed their bank details to criminals.
Anxious times can readily be exploited by scammers. They are used to create a false sense of emergency as people are more likely to be panicked and act irrationally.
As a result, banks have had to expand their fraud and investigations units accordingly. For example, at TSB the fraud team has grown by 10 to 15 per cent since the start of the pandemic.
Fraud is moving from being viewed as an operational cost a few years ago to a board-level issue.
According to the industry body UK Finance, British banks paid out £147m in 2020 reimbursing losses caused by “authorised” scams, where customers unwittingly make payments from their accounts to criminals. But roughly double that amount was lost overall to this type of fraud.
Payment comparison site Merchantsavvy estimates that last year’s global losses from payment fraud, where criminals steal someone’s money, personal property, or sensitive information, stood at $32.4bn. Whilst deceased fraud, where fraudsters use the identity of someone that has died to open bogus accounts is also on the rise. Fraudsters have also moved towards so-called social engineering fraud, a category of scam where the victim willingly makes a purchase, believing it is legitimate. An increasingly common ploy involves emails purportedly from friends asking for financial assistance.
What is clear is that fraudsters constantly adapt and find new ways to scam both companies and individuals. It is therefore critical that organisations put safeguards into place to stop commonly used tactics such as deceased identity fraud and individuals stop and think before ever providing their personal information or willingly making a payment to someone they don’t know.