For as much as consumers are falling in love with fintech, they’re also increasingly falling for online fraud, compromising their security and identity online.
Being defrauded online isn’t a fun experience, and its impacts can be hugely detrimental to the victim it targets. In mind of our cybersecurity coverage this January, Karen Jordaan, Head of UK at WorldRemit has supplied The Fintech Times with this highly comprehensive guest post, where through her own industry insight, she details the nature of these scams, and how consumers can best avoid them.
Jordaan has over 20 years’ experience working in the financial services industry, having gained specific expertise in business operations and strategy. Prior to her current role, Karen spent six years working as Chief Operating Officer at South Africa’s Institute of International Affairs and ten years working as Regional Director for Southern and East Africa at Western Union.
Since 2019, there has been a significant shift in consumer habits not only in the UK but across the world. Throughout various restrictions and lockdowns, there has been an increase in the adoption of digital banking and financial services – thanks to the safety and convenience of these platforms. During this pandemic, it is vital that we are able to recognise and avoid scams and fraudulent activities that are all too common across the web.
Over the past year, we have seen accelerated growth in the use of digital methods of making payments, as well as sending and receiving remittances. But the current trends that we are seeing infers that the increase would likely continue beyond the pandemic.
As the volume of money circulating online increases, so too does the number of fraud cases. According to UK Finance, scammers stole a total of £754million in the first half of 2021; up by 30 per cent on the previous year.
What do these scams look like?
In terms of online fraud tactics affecting the general public, there are four main types to be aware of: email, online dating, shopping, and Facebook scams.
Email scams are considered to be the most common in terms of volume. Citizens Advice found
email scams were up sevenfold in the first half of 2021, and 36 million UK adults had been targeted by scammers, with over 55s more likely to be targeted. Email scammers tend to take the approach of offering huge sums of money to help people overseas, while phishing emails are crafted to trick the individual into sharing sensitive information – from names and addresses to passwords and credit card details.
Dating sites are often also rife with scams. This usually happens when a stranger starts a conversation with their intended victim and once they have gained their trust, begins to ask for gifts, money, or even credit card details.
As shopping online increasingly becomes the norm, shopping scams are also becoming more prevalent. Often, scammers will use illegitimate websites disguised as trusted sites, or offer fake items at too-good-to-be true prices to trick consumers into thinking they have found a great deal that is way below the average retail price.
Facebook and social media scams have also become more varied as we spend more time and share more of our lives online. They may take the form of strangers introducing themselves as distant relatives or old family friends, and proceeding to gain trust and ask for help – not unlike a traditional dating scam. Others include people pretending to be investors or legitimate companies offering potential business and investment opportunities.
With the significant increase in digital fraud in the country, consumers need to be warier of the people they interact and transact with online, especially when money is involved. Not only should they protect their financial information, but they should also be immediately wary of people asking for personal information such as their phone numbers, email addresses or ID numbers.
How can we protect ourselves from online fraud?
As more of our day-to-day lives, including how we deal with our finances and shopping, have moved online, consumers should be mindful not only of the people they encounter online but also the platforms and websites that they interact with.
Consumers should think first before they click on a link, or before signing up for a financial service or an online shopping website. The more discerning users get, unfortunately, the more deceptive fraudulent activities get as well. If you think you’ve been the victim of a scam, you should immediately contact your bank and the police to report it.
Shoppers should also avoid third-party intermediaries or those that offer to make transactions on their behalf, and for money transfers only transact with trustworthy platforms such as WorldRemit that provide security measures to avoid fraud and other malicious activities.
A common red flag is receiving a message that conveys a sense of urgency and asking you to act immediately – often made to look like a request from a friend, family member, or co-worker. It’s okay to ignore or refuse requests for funds, and only criminals will try to rush or panic you. Additionally, hooks such as ‘invest and we’ll give you a 10x return’ are commonly used. As a general rule, if it sounds too good to be true, chances are, it probably is.
As a global international payments platform, a key goal for WorldRemit is to educate our users as to the dangers of online fraud – a space that is developing faster than many are able to keep track of. As online payments, commerce, and banking become increasingly prevalent, operators of these services need to take a leading role in raising awareness of how to spot and avoid online fraud. This is particularly important as consumers who may not be as familiar with the internet move more of their financial and social lives online.