According to the Central Bank of Russia, the second quarter of 2024 saw the number of fraudulent transactions decrease; at the same time, fraudsters stole more money from people’s accounts. Invest Foresight and Andrei Zhukov, Deputy Head of the Center for Media Practices at the Institute of Communications Management, Higher School of Economics, looked into the reasons for this trend.
– So, in the second quarter of this year, fraudsters stole about 4.8 bln rubles ($52.5 mln) from individual and corporate accounts, about 25% more than the previous four quarters’ average. At the same time, the number of fraudulent transactions decreased by 14.9%. What do these numbers indicate?
– The first thing to say is that this trend persists. There are fewer ‘successful’ withdrawals resulting from scams, but the amounts stolen are growing. Obviously, the effort the Bank of Russia and the banking community are putting in to prevent bank card fraud has paid off – the figures have roughly stabilized.
But scammers aren’t sitting on their hands either, inventing ever new ways to trick people and finding new avenues for illicit activity. As far as I understand, most opportunities for accessing bank clients’ money have to do with the Faster Payment System (SBP). This service for quick interbank transfers probably accounts for the growing amounts stolen by scammers. The other vulnerable format is remote banking. These two services are apparently responsible for the increment.
Obviously, scammers have found a new niche for their criminal activities, while the Central Bank is still working on ways to fight this. I am sure that the necessary resources and capabilities will be found, but as always, this takes time. Think about the usual “race” between stronger guns and thicker armor, which always involves a time lag for one of them to overtake the other.
– The number of theft attempts prevented by banks has reached 16.3 mln, almost 50% above the quarterly average in 2023. Have banks become better at this?
– Then why is SBP fraud and remote banking fraud growing? The Central Bank’s second-quarter report states a 20% increase in phishing attacks. And that’s just what has been exposed!
The scheme is quite simple. They send you a link posing as a respectable platform or service. The unsuspecting user follows the link, makes a payment, and the money is just gone.
As for banks getting better at preventing fraud, I can only speak as a client. As a user, I have seen no significant improvement in their work. We’ll wait for the third quarter, when the program to reimburse depositors for stolen money should begin to work; we’ll see if the situation improves.
In the meantime, on the contrary, we have seen the amount of such reimbursement by banks decrease.
– What are the most popular scams right now?
– We all remember the most common ones like “you must transfer the money to a secure account.” By the way, I have seen a Transfer Money to Scammers mockup button just as a joke in at least two banks.
It is yet another way for banks to say, “Enough is enough. Be vigilant.” So, the first most popular scam is transferring money to a “secure account.”
The other way is perhaps scams to get access to your account on the Gosuslugi public services website. My father-in-law almost became a target of this scam just the other day.
– Tell us how it happened.
– The scam is simple. He received a call allegedly from the Pension Fund. The person told my father-in-law that he had been working all his life and was eligible for a higher pension. Any person who has worked their whole life would agree, in their heart, that they deserve better. On the other end, the person said they would immediately recalculate his pension, but he had to send them his first PIN for accessing his Gosuslugi account. Naturally, they immediately changed his account password. The only thing that saved the case was my father-in-law’s critical thinking. When the scammers asked for his second PIN to change the phone number associated with his account, he refused to give it to them. This way, he was able to restore access to his account. So, this new scam is the second most popular among fraudsters.
– What is the third most popular?
– The third most popular scam is phishing. You receive a link to pay for something but, instead of paying for the service or product, you transfer your money to a stranger.
– What are the prospects when it comes to potential new scams?
– Scammers will be increasingly implementing AI for fraudulent purposes.
– How exactly can they use AI?
– They could replace a voice or an image – mainly a voice, of course, as it is easier to obtain. You may receive a call and, in the span of a few minutes, scammers will obtain the whole range of your intonation. By the way, one can record their voice as part of submitting one’s personal data and this data may become an object of fraud in the future.
– What would be your advice? How can people protect themselves and their money from scams? They shouldn’t answer the phone?
– My advice would be even more radical: if you receive a call from an unknown number, don’t pick up the phone at all. If somebody really needs you and it is not a scam, they will contact you in a messenger, introduce themselves and mention the person who gave your contact number. Then you can continue the conversation.
When you see an unknown number, don’t pick up.
Certainly, I would recommend constantly improving your financial literacy. Education professionals like to say that they have adopted the concept of lifelong learning. It is important to constantly update one’s knowledge and learn new things, especially if it can help you protect yourself from scammers.
I should give credit to banks though. Many of them publish advice and report on new scams so that customers don’t take the bait.