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A new report has found that consumers lost $1.03trn to scams in 2023, setting the stage for further intervention from regulators on scam prevention and reimbursement.
Last week, the Global Anti-Scam Alliance (GASA) published its 2024 Global Anti-Scam Report, highlighting the emerging trends shaping the fraud landscape across jurisdictions.
Produced in collaboration with Feedzai, a Portugal-based financial crime risk ops platform, the report is based on a survey of almost 60,000 consumers across 42 countries.
The report found that total losses were almost unchanged from the previous year, rising only 0.4 percent over 2022, when consumers lost $1.026trn to scammers.
However, according to the survey data, the global prevalence of scams continues to rise, albeit with fluctuations at the national and regional levels.
Asked how often they are exposed to scam attempts, almost half of respondents said they encounter a scam at least once a week.
Scam attempts were most prevalent in Brazil, where 41 percent of respondents said they encounter a scam every day.
Across all respondents, half said they had experienced more scam attempts in the past 12 months than in the preceding 12 months, with markets such as Brazil, Australia and South Africa the worst affected.
But despite the “severe” threat of scams globally, consumer awareness of scams is also rising, leading to increased confidence in scam detection.
Across the globe, 67 percent of respondents said they are confident that they could spot a scam, while only 9 percent said they are not confident.
Nuno Sebastiao, co-founder and CEO of Feedzai, said the shift in consumer awareness of scams is one of the "glimmers of hope” offered by the report.
“This strong display of confidence is a testament to the banks’ and others’ efforts to educate consumers on the red flags to watch for that could be a scam,” he said. “Consumers are becoming smarter at catching scams themselves.”
New threats and complacency
However, the report also stresses that increased confidence does not necessarily mean that consumers are less vulnerable.
While consumers’ ability to spot typical scams is increasing, so too is the likelihood that scammers will ditch these typical methods in favour of more complex ones.
For example, SMS and phone calls are now recognised by a clear majority of consumers as the most likely way for scammers to contact them.
Almost two-thirds of respondents said they had been contacted by scammers through these channels, with the next most common channels being email, instant messaging and social media.
Jorij Abraham, managing director of GASA, told Vixio that in developed economies this is driving a trend towards increasingly sophisticated scams.
“‘Simple’ phishing scams are working less, but the scams are getting more advanced, using AI to write well-written emails, text messages and even produce deep fake videos,” he said.
“Also, social engineering attempts where the victim is convinced to send money to the scammer are improving.”
At the same time, awareness of the use of AI by scammers is growing, but many consumers said they would struggle to recognise it if deployed against them.
For example, about a third of respondents said they were uncertain whether AI played a role in the scams they encountered.
“It’s a continuous battle, where countries are investing more in scam awareness and prevention, but scam sophistication is increasing as well,” said Abraham.
“It feels a bit like during the 90s, when computer viruses were a huge issue, and slowly anti-virus solutions were able to contain the problem better (but never resolve it).
“The same goes for scams: In future, AI will be used to check any email, text message or phone call before it gets to us for possible scams.”
Regulatory and industry response
Both GASA and Feedzai emphasised the importance of collaboration in the fight against scams, not only across financial institutions but also across sectors and government.
The report should encourage banks, telcos, social media platforms and email providers to work together to better protect consumers from scams, said Sebastiao.
As covered by Vixio, Singapore has already taken a lead in imposing cross-sector anti-scam requirements, and is likely to be followed by Australia.
Similarly, Singapore is also set to introduce new rules that will mean that the burden of reimbursement for certain scams is shared between financial institutions and telcos.
In theory, these measures are expected to lead to improvements in scam detection and prevention across the board, ensuring that scam attempts do not reach their intended targets.
Hardeep Rai, product director for fraud prevention at Feedzai, said the UK’s new rules on mandatory reimbursement for authorised push payment (APP) fraud will have a similar effect.
“The UK has introduced new regulations that place greater responsibility on banks to detect and prevent fraudulent transactions,” he said.
“It has also invested in extensive consumer awareness campaigns, like ‘Take Five’, which encourages individuals to pause and think before sharing personal information or transferring money.”
However, combating scams is an ongoing process that requires continuous adaptation, he added, which will require innovations in both fraud surveillance and in regulatory frameworks.
“Collaboration between financial institutions, regulators and consumers is essential,” he said. “Over time, these combined measures can help decrease both the incidence and impact of scams.”
