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Scammers Are Winning

€ 41.3 ($ 47.8) Billion lost in Scams in 2020, up 15%
Law enforcement worldwide received 266 million reports from scam victims

In ScamAdviser’s 3rd Global State of Scams Report, 42 countries were analyzed on the number of people scammed and 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 consumers report being a victim of scammers.

Investment scams are on the rise

The money lost per victim differs strongly by country as well as the 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 men, 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 scammers, many countries have resorted to more aggressive annual awareness campaigns. However, results are mixed. As the themes of the scam change (e.g. pet scams, COVID grants), citizens worldwide still seem to fall for them, despite earlier warnings.

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

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

Finally, 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 (€ 77.50 / $ 88,-).

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 crimes. 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 scammers.

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 focusing 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, according to ScamAdviser, sharing online fraud data globally is the only real solution to turning the tide on the worldwide epidemic of scams.  The full report will be presented at the Global Online Scam Summit and can be downloaded from ScamAdviser.com.

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Author: Jorij Abraham

Jorij Abraham has been part of the international eCommerce community since 1997. He has been manager of e-commerce at Bijenkorf (an upmarket department store chain), TUI (Europe’s largest travel organization), online publisher at Sanoma Media (the largest media company in the Benelux) and Director of Consulting as Unic (an Europe wide e-commerce strategy & implementation firm). In parallel to these activities he (fellow) founded two companies, eVentures Europe and vZine. From 2013 – 2017 he has been Director of Research & Advise at Thuiswinkel.org (the Dutch Ecommerce Association) and Ecommerce Europe (the European Ecommerce Association with 25.000+ members in 20 countries). He now is Managing Director of the Ecommerce Foundation, whose mission is to foster global digital trade and Scamadviser.com, the global blacklist for malicious websites. He is also e-commerce professor at the University of Applies Sciences, TIO.