Scam­mers are Win­ning: € 41.3 ($ 47.8) Bil­li­on lost in Scams, up 15%

Ste­fan Hes­sel and Karin Potel con­tri­bu­ted to the 3rd Glo­bal Sta­te of Scams Report

With the COVID-19 pan­de­mic, the scam indus­try has boo­med world­wi­de. In ScamAdviser’s 3rd Glo­bal Sta­te of Scams Report, 42 count­ries were ana­ly­sed on the num­ber of peo­p­le scam­med, the amount of money lost.

Num­ber of Scams Boomed

The num­ber of repor­ted scams increased from 139 mil­li­on in 2019 to 266 mil­li­on in 2020. The amount lost grew from € 36 ($ 41.7) to € 41 bil­li­on ($ 47.8).

While the defi­ni­ti­ons and report­ing methods used by dif­fe­rent count­ries for scams dif­fer stron­gly, near­ly all nati­ons have repor­ted lar­ge increa­ses in the num­ber of repor­ted scams.

The num­ber of scams and money lost is pro­ba­b­ly only a small frac­tion of the actu­al size of online fraud as less than 3% up to 15% of the con­su­mers report a scam.

Invest­ment scams are on the rise

The money lost per vic­tim dif­fers stron­gly by coun­try as well as type of scam. From less than € 10 for fake shops, coun­ter­fei­ters and sub­scrip­ti­on traps to seve­ral € 100,000 for ran­som­wa­re, Busi­ness Email Com­pro­mi­se (BEC) and investment/crypto scams.

With the “zero-interest” eco­no­my and bore­dom, espe­ci­al­ly males, pro­ved to be wil­ling vic­tims to “invest­ment oppor­tu­ni­ties”. The­se scams, also cal­led ‘pig-butchering’, can run for 3, 6 or even 12 months. The scam­mer builds up a trus­ted and some­ti­mes roman­tic rela­ti­onship with the vic­tim befo­re invi­ting him to invest in an ‘incre­di­ble opportunity’.

Count­ries are beco­ming creative

To fight scams, many count­ries have resor­ted to more aggres­si­ve annu­al awa­re­ness cam­paigns. Howe­ver, results seem to be mixed. As the the­mes of the scam chan­ges (e.g. pet scams, COVID grants), citi­zens world­wi­de still seem to fall for them, despi­te ear­lier warnings.

The Cen­ter for Cyber­se­cu­ri­ty Bel­gi­um (CCB) laun­ched an email address to report phis­hing emails. It has pro­ven to be a huge suc­cess. In 2020, CCB recei­ved 3.2 mil­li­on emails. The data is used to feed Inter­net fil­ters, pro­tec­ting Bel­gi­um citi­zens from mali­cious domains.

Paki­stan is trai­ning CyberScouts, which can be poli­ce offi­cers but also stu­dents and youngs­ters. Goal: ing­rain cyber­crime awa­re­ness in local communities.

Japan laun­ched Ope­ra­ti­on “Pre­tend to Be Foo­led” asking peo­p­le who’ve been cont­ac­ted by a scam­mer to noti­fy the poli­ce. The poten­ti­al vic­tim and poli­ce then work tog­e­ther to catch the cri­mi­nal. The tar­get vic­tim recei­ves a reward of 10,000 yen (€ 77.-).

How to Turn the Tide?

In many count­ries, scams are now the most repor­ted form of crime. In Swe­den, fraud was 5% of all cri­mes cases repor­ted in 2000. Now, it is 17% of all repor­ted crime. In the UK and USA, scams are now the most com­mon­ly expe­ri­en­ced form of crime. Final­ly, Sin­ga­po­re sta­tes that 44% of all cri­mes are rela­ted to online scams.

The World Eco­no­mic Forum esti­ma­tes that 0.05% of all cyber­crime is actual­ly pro­se­cu­ted. This makes scams, which are even more under­re­por­ted than “big cyber­cri­mes”, a very lucra­ti­ve business.

Online secu­ri­ty firms are sca­ling up. Trend Micro, for exam­p­le, is hea­vi­ly inves­t­ing in new anti-scam ser­vices, such as the real-time scam detec­tion tool Trend Micro Check. In 2021 they alre­a­dy blo­cked more than 2.4 bil­li­on phis­hing emails and scam site visits.

While many deve­lo­ping count­ries are now focus­sing on buil­ding cyber­crime awa­re­ness among­st their popu­la­ti­ons, seve­ral deve­lo­ping count­ries have lear­ned that edu­ca­ti­on alo­ne is not enough.

Count­ries like Spain and the Net­her­lands have made online report­ing via Whats­App and Tele­gram easier, resul­ting in more and bet­ter data. The Ame­ri­can Fede­ral Trade Com­mis­si­on is gathe­ring all scam-related data from 3,000 fede­ral, sta­te, and local law enforcers.

Accor­ding to seve­ral count­ries, the next step is for tech giants to take more respon­si­bi­li­ty, using their own data to iden­ti­fy and pre­vent scams better.

While the USA, Cana­da and Aus­tra­lia have star­ted sha­ring scam data among­st each other, most count­ries still lin­ger. Yet, sha­ring online fraud data glo­bal­ly is the only real solu­ti­on to tur­ning the tide on the world­wi­de epi­de­mic of scams. A lot of work remains to be done.

The full report will be pre­sen­ted at the Glo­bal Online Scam Sum­mit and can be down­loa­ded from ScamAdviser.com.

About Scam­A­d­vi­ser

Scam­A­d­vi­ser is an initia­ti­ve of the Ecom­mer­ce Foun­da­ti­on. Sin­ce 2012, Scam­A­d­vi­ser has been deve­lo­ping an algo­rithm that gives every domain a Trust Score based on 40 dif­fe­rent data sources. More than 100,000 con­su­mers check ScamAdviser.com every day and Scam­A­d­vi­ser adds more than 1 mil­li­on new web­sites to its data­ba­se every month. It’s data is used by anti-virus soft­ware, brow­sers and inter­net fil­ters to keep more than 1 bil­li­on users safe, every month. For ques­ti­ons you can cont­act: jorij.abraham@ecommercefoundation.org.

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