Merchants across the globe are expected to lose more than $20 billion to fraud in 2021 alone, a staggering amount indicating the rising menace digital fraud poses to businesses and individuals.
In the United Kingdom, phishing schemes are gaining traction, with 73% of the region’s companies suffering data breaches that stemmed from phishing within the past year. The modus operandi of fraudsters was to trick employees into forfeiting login data that they then used to breach corporate systems.
Phishers were not to blame for it all, however, as the study revealed that 74% of businesses report that their employees broke data security rules and facilitated the leakage of company data.
This data was featured in a recent PYMNTS study, produced in collaboration with PayPal, on how organizations can detect and prevent phishing attacks through employee training, regular phishing drills and siloed system access.
But as much as phishing is becoming a dangerous threat, other fraud techniques are running rampant in the U.K., where close to £97 million ($132 million) was lost to fraudsters impersonating police officers. And outside the U.K., other European countries like Denmark, France, Ireland and Luxembourg have also reported high incidences of fraud attacks.
To stem the tide, Chuck Brooks, adjunct professor of cybersecurity risk management at Georgetown University, told PYMNTS that businesses can make it more difficult to get phished by limiting employee access or requiring two-step authentication to access certain sites. “A lot of companies will also outlaw certain sites that workers can’t go visit,” he said.
Businesses are also deploying various defenses to stop fraudsters in their tracks. A survey cited in the PYMNTS report found that a third of financial institutions (FIs) have accelerated their artificial intelligence (AI) and machine learning (ML) programs, for example, as increased digitization during the pandemic has made it easier for bad actors to engage in illicit activities.
Close to 60% of these FIs said that they have added AI and ML to their anti-money laundering (AML) programs or are planning to do so within the next 12 to 18 months.
Whether it’s against businesses or consumers, fraudsters will use any means to achieve their goal.
This month, data from Action Fraud, UK’s reporting center for fraud and cybercrime, showed that consumers continue to be victims of another type of digital fraud, this time involving cryptocurrencies.
This has led to over £146 million ($201.2 million) in virtual currency-related losses since the start of this year, representing a staggering 30% increase compared to the amount lost during the whole of 2020.
According to Temporary Detective Chief Inspector Craig Mullish from the City of London Police, there has been a significant surge in cryptocurrency fraud reports over the past few years, as people spend more time online. “Being online more means criminals have a greater opportunity to approach unsuspecting victims with fraudulent investment opportunities,” Mullish said.
And while individuals have to take charge of their own online protection and conduct the necessary research before making an investment, the U.K. government is counting on the Joint Fraud Taskforce to help curb wider fraud in the country.
“[The] Government alone cannot fix this, which is why The Joint Fraud Taskforce will bring together key business leaders to work in partnership to protect the public and tackle this cowardly crime,” U.K. Home Secretary Priti Patel was quoted as saying in a report from the U.K.’s Evening Standard.
Set up in 2016, the taskforce is being re-launched under the leadership of Security Minister Damien Hinds and will meet for the first time on Thursday (Oct. 21), per the report. The agency includes members from the public and private sector, law enforcement and victims’ groups.