1.73% of financial transactions in first quarter of 2023 had criminal intent
Vanita Pandey — Foto: Divulgação
In Brazil, there were 2.800 financial fraud attempts per minute in electronic channels in the first quarter of 2023 alone, according to the cross-referencing of research results from the fraud prevention and digital security company CAF, and data from the Central Bank. The CAF study shows that from January to March, 1.73% of digital transactions in the country’s financial system had criminal intent.
This percentage represents approximately 365 million fraud attempts in digital financial channels alone during this period. The CAF analyzed the evidence of attempted fraud in operations in various areas, such as financial services, mobile environment, which includes transportation and delivery, and e-commerce. Of the three, the highest rate fell in the first group. Mobile showed a rate of 1.27%, while e-commerce was 0.31% in the first quarter of 2023.
According to the survey, the highest volume of fraud happens primarily during business hours, between 10 a.m. and 6 p.m. “This suggests that fraudsters behave similarly to the average user or are simply trying to go unnoticed,” said Vanita Pandey, CAF’s chief marketing officer (CMO).
Despite the higher concentration of volume during business hours, the survey results show that the period with the highest percentage of fraudulent transactions is from midnight to 5 am. The peak happens at 3 am when the fraud rate reaches 3.47% in comparison with the total volume of transactions in that hour.
Another data pointed out by the Fraud Attempts Indicator of Serasa Experian showed that in March this year, there was a fraud every ten seconds in the country. In that month, compared to February, the attempts increased by 15.2%. But compared to March 2022 there was a decrease of 30%.
According to Caio Rocha, head of Authentication and Fraud Prevention Products at Serasa Experian, “One of the factors that could have caused the year-on-year decrease is the slowdown in the credit search, because, with fewer transactions, the opportunities decrease.”
The CAF survey also shows an increase in the sophistication of fraud attempts. In the first quarter, for example, there was a high incidence of attempts to circumvent biometric recognition systems. According to the survey, one of the most common techniques is “spoofing” of facial biometrics, in which a manipulated image is used to attempt to impersonate another person and circumvent digital protection.
In addition to this modality, the study shows that fraud attempts using facial biometrics have also increased. In these cases, the criminal uses his image to impersonate another person, with the addition of false information.
Amid the digitalization and the emergence of new technologies applied to the payment and investment industry, the number of fraud attempts has accelerated, says Marcos Vinicius Silva Cardoso, a lawyer specializing in financial market causes, and partner of the law firm Cardoso & Zaniboni. According to him, by May this year, the number of consultations for possible legal actions against fraud of this kind already exceeds 30% of the volume of the entire 2022. “There are about 12 requests a day here in the office,” he said.
Tom Canabarro, CEO of Konduto, anti-fraud analyses company of Boa Vista Group, also sees an increase in frauds and scams in the wake of the greater digitalization of the population. According to the specialist, the emergence of the Pix, an instant payment system, has boosted a wave of old scams in new clothes: “Pix is an accelerator for the speed of the fraud and for the fraudster to get away with the money,” he said.
Mr. Canabarro cites the Ponzi scheme as an example. “The person receives proposals through WhatsApp to send money through Pix and get double back. So, the user sends R$100 and gets R$200, then continues to feed the scam until a time he sends R$1,000 and gets nothing back.”
In the investment sector, frauds are also undergoing digital “repagination,” said Mr. Cardoso. The lawyer cites cryptocurrencies as fertile ground for criminals. “It’s a game of illusion. We had a client who put $20,000 into one of these fake crypto investment schemes. When the person wants to withdraw, the scammers say they have to pay, for example, $15,000 in taxes and fees to withdraw $90,000. The person can’t get any more back.”
In Ms. Pandey’s view, digital ecosystems are interconnected, which adds to the complexity of prevention. “There is a lot of identity-based information that is connected. For example, a fraudulent crypto offer may have started on a dating app where one person met another, who referred him or her to someone and provided the data.”
*Por Sérgio Tauhata — São Paulo
Source: Valor International