Scam alert - Higher incidence and more sophisticated
In Ireland alone last year, there were 365,000 cases of fraudulent scams
They are rather euphemistically referred to as 'nuisance communications.
Whether it's the text purporting to be from a child on a 'friend's mobile', the chance to invest in a winning scheme - right now - or the urgent missed payment, scams of various hues appear to have been increasing in prevalence of late.
At their most benign, they are an inconvenience.
Yet, they can lead to significant financial damage to individuals who innocently or absent-mindedly engage and suddenly realise that it's too late.
Cybercriminals only need a handful of unwilling participants to make a killing in any given day.
It is a lucrative trade which goes to explain why they are coming at us with greater regularity.
How lucrative?
According to research from the communications regulator, ComReg, the quantifiable harm to individuals and businesses here arising from nuisance communications is conservatively estimated at over €300 million every year.
The research further found that in Ireland alone last year, there were 365,000 cases of fraudulent scams.
That breaks down quite neatly to an average of 1,000 incidents per day.
More than 5,000 businesses said they had been the victim of fraud arising from scam calls or texts in the last year.
According to research carried out on behalf of Revolut by Dynata, the incidence of scams is definitely on the rise.
Nearly two thirds of consumers who were contacted said they had noticed an increase in such communications in the past year with nearly half - 46% - admitting that they had personally experienced fraud in the last 12 months.
Bank of Ireland recently highlighted a 25% increase in the incidence of scams in the month of July alone as scammers took advantage of the holidays in the hope that they might catch individuals off guard while out of their regular routine.
"There has been a continued increase in fraud in general," Niamh Davenport, Head of Financial Crime at the Banking and Payments Federation's FraudSMART initiative confirms.
"Smishing (text-based scams) and investment scams are the two key ones we've noticed of late."
Bank warnings
In the past fortnight, both Bank of Ireland and AIB have issued warnings about scams of varying complexity but with the potential to cause severe financial harm to individuals and firms.
In Bank of Ireland's case, it relates to fraudsters duping customers into giving them remote access to their bank accounts.
The customer gets a phone call from someone claiming to be from the bank and they are asked to log into their online banking.
The fraudster then asks the customer to go to another new website address, supposedly for a live chat service or to verify the customer's PC, but in reality, it allows the fraudster remote access to the customer's computer.
AIB's warning relates to sophisticated investment scams where the names and job titles of genuine bank staff are used by fraudsters to entice individuals to part with their money.
They are often accompanied with convincing brochures and materials that appear to be legitimate.
"There could be three months' worth of work in talking to the consumer before they make a payment," Niamh Davenport explained.
"It is profitable for the fraudsters to put the time and effort in especially with investment scams. They're professionals and this is a full-time job," she added.
Ms Davenport explained that these scams are particularly targetted at individuals coming up to retirement who might be looking to put a lump sum to work, particularly in the context of the cost-of-living crisis.
"At one stage, the minimum investment was €25,000. These are generally not people who have 25k lying around. This money is hard earned," she explained.
These types of attacks are referred to within the industry as 'pig butchering', Dermot Williams, Managing Director of cybersecurity company Threatscape explains.
They often apply to investment or romance scams where scammers essentially spend months 'fattening the pig' before they move in for the kill, generally with a big pay day at the end.
Shift away from banks towards providers
Banks have been quick to alert the public to the incidence of scams as they encounter them.
That may partly go to explain the perceptible shift away from the banks generally in many 'smishing' scams that have come our way of late.
Many of the recent iterations have impersonated companies and services such as utility providers or toll road operators, for example.
Two of the scam texts that most people will have received of late relate to a missed toll payment or the 'child in distress' text.
Both are aimed at eliciting a quick response which will see the victim heading down the road to fraud without thinking.
"They are generally preying on some human emotion or weakness such as greed, sympathy or loneliness," Dermot Williams explained.
He said many of the scams will be tailored to coincide with events, such as the Rugby World Cup that's taking in place in France right now or the floods in Libya.
"They have a remarkable ability to come up with angles on what will work with people," he added.
Technology has made the transmission of such scams easier and more sophisticated.
Thousands of texts can be sent at the touch of a button with a potential bounty coming from just a few responses.
Another technological advancement which has seen consumers falling prey to scams in greater numbers has been the appearance of a fraudulent text within the actual text stream of a consumer's contact with a bank or service provider making the text look legitimate.
AI and scams
Scam complexity is likely to be ramped up even further with the development of Artificial Intelligence (AI).
Already, the ability of AI to absorb personal data, such as emails, photographs, videos and voice recordings to imitate people is proving to be a new and unprecedented challenge.
On the other hand, however, AI will also present agencies fighting fraud with increasingly sophisticated scam-detection methods.
"It's like an arms race. The technology is available to both sides," Dermot Williams pointed out.
He references the romance and investment scam scenario as one area where AI could benefit the fraudster.
Working alone, a fraudster could have dozens of potential victims on the go with whom they have to spend a lot time engaging and keeping their story credible.
"Imagine if you could get AI to do that. It could keep track of thousands of victims and only alert you when one is ripe for the taking," he explained.
"Unfortunately, there's evidence that people are building tools of that nature where the heavy lifting is done by the computer and then they step in."
Governments, banks and other financial organisations are now fighting back with increasingly sophisticated fraud-detection methods.
AI and machine learning models could be a part of the solution to dealing with the increasing complexity, sophistication and prevalence of such scams.
Money mules
One area of fraud where the BPFI has placed a lot of emphasis of late with students returning to college is the use of so-called money mule accounts.
A money mule is someone who receives criminal money into their bank account and transfers it into another account, often in return for money or an expensive gift.
FraudSMART said it detected a notable rise in the use of accounts for this purpose in the last year with €17.5 million illegally transferred through 2,600 money mule accounts in the first six months of 2023.
"There was a slight increase in the number of money mule accounts but what we've noticed is that the value of money going through these accounts is a lot larger," Niamh Davenport explained.
The average amount moving through such accounts earlier this year was €10,000.
"The feedback we have got is that it's harmless and victimless. It isn't," Ms Davenport said.
"We would ask people to think of where this money is coming from. The money that they are putting through bank accounts is funding drug trafficking or human trafficking. It is not harmless or victimless."
How can scams be combated?
They can't, really. The scams just become more sophisticated and more targetted which technological developments will only serve to enhance.
It's up to institutions to alert consumers and for individuals themselves to be more aware of the tell-tale signs, which is easier said than done when a fraudster has pulled you in with a toll road smishing scam hours or days after you went through a toll road.
As a good rule of thumb, a text with a link purportedly from a service provider or government department tends to be a fraudulent link.
If in doubt, check with the business or service provider.
The banking and payments app Revolut recently launched an in-app course on detecting scams.
It includes five lessons with materials explaining various types of fraud.
Dermot Williams points out that businesses can be an area of particular vulnerability with multiple individuals working on several projects.
He says the changes in working styles that have come about in the aftermath of the pandemic have made business environments a particularly fertile ground for fraudsters.
Informal checks that may have taken place in the office when everyone was present are now frequently made over email or online and that's where the scammers can successfully intercept.
"You're only as strong as your weakest link," he concluded.