Payment fraud has been increasing in Canada in recent times. A recent study found that it was not just senior citizens who were falling prey to these cybercriminals, but millennials too could lose their money just as quickly. Similarly, many businesses, both small and large, are losing funds due to payment fraud.
Payment fraud is basically any false or illegal transaction done by a cybercriminal. The perpetrator deprives the victim of funds, personal property, interest or sensitive information via the Internet. It is usually done by using fraudulent or unauthorized transactions or by using stolen cards or merchandise.
In the first half of 2017, around ten thousand fraud-related complaints were registered. Canadians lost around $38 million during the period due to payment fraud and another $5.5 million due to Identity theft. However, this data released by the Canadian Anti-Fraud Centre is just the tip of the iceberg since many people and business don’t report payment fraud if the amount is not significant enough.
Other types of fraud include identity and credit card fraud, where criminals buy goods or transfer cash with stolen credit cards. Criminals use various methods to steal credit card information. When a customer uses a card at an ATM, a cybercriminal can use a skimming device to read the card. The card can then be cloned and used to buy goods or services. While banks are now coming up with new methods to outwit scammers and cybercriminals, many credit cards remain vulnerable to such attacks.
Another way to steal credit card data is by installing malware in user’s computers, phones and other devices. They can get the user’s credit card details and then proceed to use the details to buy goods. Staying safe while shopping online is very important, and looking for the ‘HTTPS’ secure site while making payments can be a good way to know you are making a legitimate transaction. Similarly, avoiding sites which look fraudulent or are selling things at prices that seem too good to be true is also important.
Other types of payment fraud are fake cheques and fake business emails or hacked emails. Businesses, both large and small, are often targeted for the fake cheque scam where they are sent fake cheques for more than the amount that was agreed upon between both parties. Then the scammer requests the entrepreneur or person to deposit the cheque and wire him the extra amount that has been sent by mistake. It is usually only after the money is wired overt that the unsuspecting victim realizes the cheque has bounced and he has lost money.
Fake business emails or hacked business emails are another method of payment fraud that seems to be growing. Cybercriminals understand how a company’s email system works. Then the criminal sends an urgent email that looks like it is from a senior executive to the payments department to pay an invoice urgently. The invoice later turns to be fake, and the money trail leads the victims nowhere. Companies should implement various security measures that include a callback policy, transaction threshold alerts, and re-evaluation of transactions and limits to prevent such attacks.
Individuals and companies must be more vigilant while dealing with all types of online payments and transactions to keep such fraudsters at bay. Banks also play their part in stepping up security and making it difficult for these criminals to cheat unsuspecting victims. When fraud is committed on one bank, there should be a network through which all other banks can quickly learn of the modus-operandi and the perpetrators.
Fraudsters have existed for a long time, as new technologies develop, they learn new ways to defraud potential victims. So the next time you get a payment request, read it twice and confirm your decision before making the payment.