The Current Landscape of Cyber Investment Fraud is both Complex and Evolving

Here are some key insights and trends based on recent data and reports:

1. Investment Scams Dominating Losses

In 2022, consumers reported losing more than $3.8 billion to investment scams, which was the highest loss category. This figure more than doubled the amount reported in 2021. The second-highest loss was due to imposter scams, totalling $2.6 billion, up from $2.4 billion in 2021.

(https://www.ftc.gov/news-events/news/press-releases/2023/02/new-ftc-data-show-consumers-reported-losing-nearly-88-billion-scams-2022#:~:text=Consumers%20reported%20losing%20more%20money,4%20billion%20in%202021)

2. Business Email Compromise (BEC)

BEC remained a significant threat in 2022, causing $2.7 billion in financial loss, a 14% increase from 2021. While it dropped to second place in terms of loss, BEC continues to be a top threat vector

(https://www.stewart.com/en/insights/2023/5-takeaways-from-the-latest-fbi-ic3-report-on-cybercrime.html#:~:text=2,from%202021)

3. Growth of Cyber-enabled Fraud

There has been an exponential increase in both the volume of frauds reported and their global spread. Cyber-enabled fraud is now a major transnational organized crime, significantly impacting individuals, organizations, and economies.

(https://www.fatf-gafi.org/en/publications/Methodsandtrends/illicit-financial-flows-cyber-enabled-fraud.html#:~:text=Paris%2C%209%20November%202023%20,eroding%20trust%20in%20digital%20systems)

4. Peer-to-Peer Fraud

In 2023, peer-to-peer fraud and other digital frauds are considered the most worrying cyber threats by bankers, constituting more than 29% of their concerns

(https://www.csoonline.com/article/574379/p-to-p-fraud-most-concerning-cyber-threat-in-2023-csi.html#:~:text=Peer,to)

5. Cryptocurrency Investment Fraud

Cryptocurrency investment fraud grew by 183% in 2022, rising from $907 million in 2021 to $2.57 billion. Spoofing is often used in these scams to mislead and impersonate legitimate sources

(https://alluresecurity.com/2023/03/30/fbi-new-record-for-2022-cyber-enabled-fraud-in-us-driven-by-phishing-investment-scams-spoofing/#:~:text=Spoofing%20is%20singled%20out%20as,57%20billion)

6. Influencers Sharing Credit Card Details

Social media influencers have been sharing their full payment card details for self-promotion, leading to excessive authorization fees, identity morphing, false positives, and website timeouts due to the surge in traffic.

(https://www.cybersource.com/en-us/blog/2023/ten-biggest-fraud-trends.html)

7. Inflation Leading to Unfamiliar Marketplaces

The cost-of-living crisis is pushing consumers towards less familiar websites in search of competitive prices. This has led to a rise in grey market usage, counterfeit websites, fake merchants on social media, and associated fraudulent activities

(https://www.cybersource.com/en-us/blog/2023/ten-biggest-fraud-trends.html)

8. Impact of Geopolitical Uncertainty

The Russia-Ukraine conflict has driven merchants to block payment details from sanctioned countries. However, there’s an increase in niche freight forwarder activities supporting shipping to these countries, as well as a rise in surrogate shipping.

9. Increase in ‘Buy Now, Pay Later’ Schemes

The cost-of-living crisis has accelerated the use of instalment loans for purchases. This trend has led to a rise in fraudulent ‘buy now, pay never’ schemes, as many companies offer instant loans without formal credit checks.

10. Adapting to Strong Customer Authentication (SCA)

In Europe, following the enforcement of SCA, fraudsters are adapting their tactics, targeting card issuers likely to offer frictionless flows and exploiting seasonal promotional periods to bypass thresholds.

These trends illustrate the dynamic nature of cyber investment fraud and underscore the importance of staying informed and vigilant in the face of evolving tactics and schemes.