‘Scamdemic’: Is This the Age of Scams?
Online fraud has been a problem since the beginning stages of the internet. In fact, the term ‘phishing’ is reported to have been invented in the mid-90s. It was born out of the idea that scammers were using emails to lure in victims by ‘fishing’ for personal information in the metaphorical sea of internet users. Since the internet was still relatively new, this was largely successful. Many people hadn’t yet had the time to become internet savvy and protect themselves against scams.
Since the pandemic, phishing attacks and other scams have profoundly increased. So much has been uncertain during this time. Thus, these past 20 months allowed scammers to exploit their victims’ anxieties for profit. This is especially true because so many have been forced into vulnerable positions. It is often when you are at your most vulnerable that you are most susceptible to being scammed. Scammers know that by tapping into your emotions, they are more likely to get you to do what they want.
On October 21, a taskforce set up by the British government met to discuss ways to overcome the rise in scams. In an attempt to tackle the problem, financial leaders and experts in the field spoke with Damien Hinds, minister for security. This came after the UK’s communications regulator, Ofcom, discovered that in the last three months, 45 million people received at least one fraudulent message.
Because the UK has found itself in the middle of this global uptick, it got us thinking: what makes an entire nation more susceptible to these kinds of deceptions?
Why is Britain the bank scam capital of the world?
As of recently, Britain has become the global epicentre for online fraud. In the first six months of 2021, a record of £754 million was stolen from British people. Per capita, this number is about triple that of the US in 2020. Digital shopping and banking hit record numbers the past year, making this the prime moment for online scams. One large bank with global operations revealed that UK accounts make up roughly 80% of their personal fraud cases.
According to some of the largest British banks and over a dozen security specialists, cybercriminals have been buying people’s personal details on the dark web. There has also been a rise in data breaches. These incidents have made personal information more accessible to criminals.
The experts argue that Britain is the perfect place to test out scams not simply because of its use of English (the most widely used language in the world). It is also because of the UK’s payment infrastructure and relaxed policing of this kind of crime.
Is tech making scams more ubiquitous?
While cryptocurrency has proven to be a ground-breaking technology, it has also allowed for more people to fall victim to fraudsters. There have been many accounts of exit scams within the cryptocurrency community. An exit scam is when a promoter up and vanishes with all of their clients’ investments.
Most recently, and on a global scale, a ‘rug pull’ scam shook the crypto world. The digital token, Squid, emerged once it became evident that the South Korean show Squid Game was Netflix’s most popular series of all time. The token was sold on a play-to-earn basis, which is in line with the show’s plot. Its price was soaring. However, soon after the rise in popularity, it was revealed that buyers could not resell or exchange Squid tokens. Cryptocurrencies rely on their ability to be resold and exchanged for other forms of currency. Therefore, the fraudulent nature of Squid became immediately apparent.
How can you prevent being attacked?
First, be aware of the types of scams that exist. Phishing has evolved since the 90s. Scams have become incredibly sophisticated, and cybercriminals are far more conniving and digitally literate than they were then.
Some techniques to be aware of are:
- Vishing: when a scammer calls a potential victim and impersonates someone else (like the HMRC) to steal financial information
- Smishing: a text sent that typically includes a link, which when clicked will install malware on the device
- Angler phishing: when the cybercriminal uses the messaging and notification features of a social media application to encourage the victim to take action
- Spear phishing: this is a more targeted form of phishing in which the fraudster emails a specific individual within an organisation and makes the unlucky recipient believe the message came from a colleague
- Whaling, or CEO fraud: in this type of fraud, the attacker impersonates the CEO of a company by using a similar email address to make a request from another person within the organisation
- Pharming: this is more technical, but it is when a hacker hijacks a server which then redirects the victim to a malicious IP address that looks like a genuine website
- and many more!
Next, think clearly before making any rash financial decisions. Cybercriminals typically establish a false sense of urgency. They do this because it is difficult to think clearly when faced with a pressing matter. Their goal is for you to drop your guard so that you are more willing to provide your bank details. Therefore, you must remember that nothing is that urgent. Always take a moment to assess the situation. Do everything you can to examine exactly what the request is, who is making it and why before clicking on any links or sending anything back.
Are you a British expat living in Spain or Portugal?
Schedule a free, no obligation consultation with one of our Wealth Managers today to discuss your financial goals.