Visa’s latest Biannual Threats Report for Spring 2024 underscores the concerning rise of “pig butchering” scams, showcasing the sophisticated threats plaguing both individuals and businesses in the global payments ecosystem.
These scams cleverly exploit emotional vulnerabilities by luring victims into online relationships and convincing them to invest in fake crypto trading platforms.
These scams are especially prevalent on holidays like Valentine’s Day and New Year’s Eve through social media and dating sites.
These pig butchering scams exploit AI to craft deceptive campaigns, resulting in billions of dollars lost by these unsuspecting individuals. Visa’s study reveals that these scams have targeted a staggering 10% of surveyed adults.
The Human Element: A Growing Concern
A worrying trend emerges from the report: despite a decrease in the total number of consumer-reported scams, financial losses have surged, indicating a move towards more effective and costly fraudulent operations.
This shift is compounded by Visa’s observation that more than one-third of adults surveyed opt not to report scams, hinting at potentially greater unreported financial damages.
The reluctance to report scams underscores the need for increased vigilance and reporting to combat these threats effectively.
The report doesn’t just highlight “pig butchering” scams; it also sheds light on other fraud methods that exploit trust and emotion.
Inheritance scams see perpetrators posing as legal professionals from seemingly legitimate law firms to inform victims of non-existent legacies, demanding personal information and initial payment to secure future gains.
Meanwhile, humanitarian relief scams exploit generosity, using social media to drive donations to fake causes.
Triangulation fraud involves creating illegitimate online stores offering high-demand goods at low prices to steal payment details, a method that has cost merchants up to US$1 billion in a single month.
Wider Organisational Threats
The report points to a significant increase in attacks targeting supply chains and third-party services, with fraudsters using artificial intelligence to bypass established fraud controls implemented by banks.
Notably, there have been marked increases in Purchase Return Authorisation (PRA) fraud and ransomware attacks, emphasising the evolving challenge of protecting financial infrastructure.
Visa integrates its human resources with technological solutions to develop strategies that mitigate and prevent attacks on the payments ecosystem.
The payments firm said that it maintains ongoing communication with all payment system participants to ensure the identification of at-risk data and timely notification of impacted stakeholders.
Paul Fabara
“With the use of Generative AI and other emerging technologies, scams are more convincing than ever, leading to unprecedented losses for consumers.
Visa is uniquely positioned to address these threats, with investments in tech and innovation reaching over US$10 billion over the past five years. These investments, in addition to our ongoing education and top talent, allow us to stay ahead of scams and protect consumers.”
said Paul Fabara, Chief Risk and Client Services Officer, Visa.
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- Source: https://fintechnews.sg/93503/payments/visa-ai-fuels-surge-in-emotion-based-scams-like-pig-butchering-and-inheritance-fraud/
