Continuous advancements in fraud prevention software are needed to protect consumer funds as cybercriminals continue to adapt to new defenses imposed by banks, merchants, buyers, and processors. reason given. It’s a cat and mouse game. The goal of the game? Find and exploit the vulnerable link in the chain of defense.
Advanced technologies like machine learning have been deployed to go beyond humans by using past data to predict the activities of fraudsters, which most of them do. But the pandemic has left consumers vulnerable to economic instability, which in turn presents bright opportunities for criminals to exploit. Today, in the midst of a cost-of-living crisis, criminals don’t hesitate to exploit the weakest link in the chain: the consumer.
Evolve or lose: How fraudsters are adapting
First, let’s see how cheaters adapt stronger fraud defenses to exploit human connections. Traditionally, fraudsters have used unauthorized methods of fraud, where – according to the Federal Reserve’s Fraud Classification model – the fraudster uses a tool, such as performing unauthorized payments by card or control of a consumer’s account. Unauthorized fraud depends on finding a weak link in protecting a consumer’s account, such as a weak password, or breaking into a system to find a loophole in the defense.
On the other hand, an authorized fraud or scam is classified as manipulating the account holder in some way – whether by forging a relationship with them, impersonating a third party, or selling fake products or services. pose. This is often referred to as social engineering.
A new environment for new fraud methods
Identity theft scams are the most lucrative way scammers can adapt. UK Finance reports that in 2021, £583 million was stolen from UK consumers through authorized methods, including £214 million through identity theft scams.
During the nationwide shutdown caused by the pandemic, consumers turned to e-commerce for purchases, while governments responded by supporting people with COVID-19 relief packages. Scammers perceive people’s vulnerability as the weakest link and send fake text messages with malicious links to consumers, asking them to pay to have their packages delivered safely. The same goes for bailout packages, where scammers pose as the government and ask for bank details. In recent months, the cost of living crisis, caused in part by economic sanctions against Russia, has caused household spending to increase when it comes to paying for essentials like food. products and energy bills. The UK alone has seen a staggering 40-year high annual inflation rate of 9.4%. Many countries have relief programs to help consumers pay for heating and fuel increases. This has created a new opportunity for scammers to target people who owe energy suppliers, posing as debt collectors or government aid programs.
The rise of money mules
With the cost of living rising and consumers increasingly scrambling to pay essential bills, they are not only vulnerable to fraud but also employed as financial mules. The money the scammer has defrauded from the victim will be transferred to the account of a financial mule. Criminals often use social media to target consumers with ads to make a quick buck. Often, they can convince someone to accidentally put £1,000 of illicit money into their account by letting them keep £100. Usually, it’s the financial mule that gets taken away, not the scammer.
When can we put an end to the game of cat and mouse?
Cheats continue to adapt to the weaknesses that the world around us exposes. Everyone, even the most tech-savvy generations, is at risk. In places where there is less regulation of allowed scams and scams, than what currently exists for fraudulent practices, consumer education and vigilance are just the first steps. First to close the gap. Preventing scams will be a global, cross-industry effort just beginning.
