Tag: online fraud

How the Peak Travel Season Will Impact Payment Fraud | Entrepreneur
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Summer is just around the corner, and with it comes an influx of vacationers ready to explore new destinations. As the summer travel season begins, businesses operating within travel and hospitality must adopt robust strategies to manage the anticipated increase in transaction volumes and fraud risks. These strategies must also effectively manage disputes and chargebacks during a peak travel period that’s expected to break records.

Americans are still choosing to prioritize their vacations despite challenges like international unrest and rising prices. Projections from the Transportation Security Administration (TSA) suggest we’ll see a record-breaking summer travel season in 2024, with officials anticipating the busiest travel season ever.

52% of consumers say they plan to travel as much in 2024 as last year, with another 40% saying they expect to travel even more. These prospective travelers already have significant budgets set aside for these trips.

Millennials and Gen Z are the driving forces behind this trend. People in this cohort tend to prioritize experiences over material goods and seek a healthy work-life balance to explore new places and cultures. They’re also heavily influenced by social media, where many influencers showcase travel as part of an aspirational lifestyle.

This surge in travel drives global business at every level of the economy, but it also creates a heightened sense of risk. For businesses, effectively managing fraud and chargeback risk year-round is crucial to navigating the travel space.

Let’s explore the best strategies and tactics for managing these threats, whether in-house, hybrid or outsourced, and why asking for help might be the most effective course of action this year.

Related: How a Bad Billing Descriptor Can Cost You

The challenges ahead

While a travel boom is fantastic for businesses and local economies, it poses significant challenges that underscore the necessity of comprehensive fraud and chargeback management. An exceptionally busy travel season can aggravate existing chargeback triggers already intrinsic to the travel space. We may see:
1. Increased Transaction Volume. The sheer volume of transactions during peak travel seasons makes managing and monitoring every transaction closely difficult. This increased volume can overwhelm internal systems, leading to errors and delays in handling disputes, contributing to more chargebacks.
2. Fraudulent Activities. Fraudsters take advantage of the busy season, knowing that the high transaction volumes can mask their activities. From fake travel deals to phishing emails, the types of fraud targeting travelers are diverse and sophisticated, increasing the likelihood of chargebacks from unauthorized transactions.
3. Overbooked Flights and Hotel Shortages. High demand can lead to overbooked flights and sold-out hotels. When travelers are bumped from flights or denied rooms, dissatisfaction spikes. So, too, does the number of chargebacks as customers dispute charges for services they didn’t receive.
4. Poor Customer Service. Understaffing is common during peak periods, resulting in longer wait times, unresolved complaints and poor service. Frustrated customers often turn to chargebacks to resolve their grievances when they feel neglected or mistreated.
5. Operational Strain. Handling a surge in transactions requires a well-prepared operational setup. Without it, companies might fail to process payments and refunds promptly, further aggravating customers and leading to more disputes and chargebacks.
6. Financial and Reputational Impact. Chargebacks result in financial losses due to refunds and fees. However, they also damage a company’s reputation with customers and hurt their relationships with financial institutions. High chargeback rates can result in higher processing fees and, in severe cases, the loss of merchant processing privileges.
Considering what’s at stake, you can see why it’s incredibly urgent to prioritize effective chargeback management. Aside from saving time and money, it can also help boost customer trust during the peak travel season.

Managing chargebacks: In-house, hybrid or outsourced?

Travel operators can adopt one of three chargeback management strategies to handle the increased demand and the potential challenges outlined above.

First, they can manage everything in-house. This involves maintaining a dedicated team to manage disputes, enhance customer support and refine fraud detection systems. While this approach offers direct control, it can be resource-intensive and requires constant updates and training to stay updated on new fraud tactics and regulatory changes.

A second option is to outsource everything. This allows travel companies to benefit from specialized expertise and advanced technologies without the burden of maintaining an in-house team. Third-party providers can offer scalable solutions, real-time fraud detection and comprehensive chargeback prevention strategies. However, it can also mean that merchants lack insight.

As a third option, merchants can try taking a more hybrid approach. Combining internal efforts with external support lets businesses leverage advanced technologies and knowledge from third-party providers while retaining some control over the process. This approach provides a balance between direct oversight and external expertise.

Related: How to Fight Fraud and Chargebacks Should Regulation Fail

Industry collaboration

As we gear up for a record-setting summer, it’s clear that improved industry collaboration could be the key to addressing fraud and chargebacks.

We could consider the transformative potential of open data and artificial intelligence (AI) within the tourism industry. Combining an open data strategy with AI can enhance decision-making processes, helping to personalize customer experiences and optimize operations.

By harnessing open data, businesses can gain valuable insights into traveler preferences and behaviors. This insight can be refined using AI to forecast trends and tailor services.

Related: Think You Can’t Win Against Chargebacks? Think Again.

Open data and AI will have a much more symbiotic relationship in the future. The kind of collective effort that open data demands will create a more secure environment for our customers and protect our businesses from the financial strain of chargebacks. These technologies promise to boost efficiency and innovation in tourism, help manage threats and enhance the overall travel experience.

Ultimately, travel operators need to be proactive. By adopting the right strategies and fostering collaboration across the industry, operators can thrive during this busy travel season and create a better experience for all travelers.
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Monica Eaton

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June 18, 2024
Global Anti Scam Alliance Launches 10 Recommendations to Turn the Tide on Scams
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The Internet can only be made a safer place with increased international cooperation.
AMSTERDAM, April 20, 2023 (Newswire.com)
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Today, the Global Anti Scam Alliance, APWG and the Global Cyber Alliance officially launched the 10 Recommendations at the CyberSec Event in Brussels with a panel discussion with representatives from the European Commission, Europol and the Financial, Internet and Cybersecurity industries.

Online scams have become a global epidemic. Consumers worldwide lost an estimated $55 billion as a result of online scams. The social and emotional trauma cannot even be measured. In many countries, online scams are the most reported type of crime, such as in the U.K., where 41% of all reported crimes are now related to online fraud, and 50% in Singapore.

Further, the loss is likely a gross underestimate, as only 7% of all online scams are even reported. Because a mere 0.05% of all cybercriminals are caught and new technologies like Deep Fakes and ChatGPT are making it increasingly harder for consumers and law enforcement to identify deceit, online scams will continue to grow and thrive.

Governments and security companies are largely focused on fighting the “Big Cybercrime” that target (large) corporates and national infrastructure. However, this ignores the fact that online scams are also harming consumers and diminishing their trust in the global digital economy, which now represents 15.5% of global GDP. This is unacceptable and more needs to be done to protect consumers worldwide.

At the 3rd Global Anti Scam Summit last November, 1,300 (virtual and physical) participants collectively formulated 10 recommendations to enhance consumer protection against global scams. The 10 recommendations are:
1. Raise Consumer Awareness on a National level, Unified & Continuously
2. Facilitate One National, Easy, Online Reporting Platform
3. Set up cross-organizational Support for the Fraud Victims
4. Develop Infrastructural Tools to Protect Consumers
5. Make Fraud Traceable Cross-Border
6. Set up a Dedicated National Consumer Cyber Security Center
7. Establish a Global Scam Data Sharing Hub
8. Make Service Providers responsible & Liable for Fraud Enablement
9. Allow Preventive Action (Warn, Block, Stop)
10. Enact an International Scam Investigation & Prosecution Network
“GCA has supported the Global Anti Scam Summit from its very first edition,” said Alejandro Fernández-Cernuda, Director of Engagement and moderator of the panel. “The evolution of the initiative, from a gathering of experts to a call to action against online fraud endorsed by key players worldwide, demonstrates the real power of well-coordinated multi-stakeholder collaboration,” he added.

Jorij Abraham, General Manager of the GASA and ScamAdviser, comments, “Defining these 10 recommendations has only been a first step. Now, we will focus on getting companies as well as consumers to endorse these recommendations and put pressure on governments that change is not only required but also has to happen fast in order to stop the flood of online scams. At the 4th Global Anti Scam Summit, we will further define each of the Ten Recommendations in order to Turn the Tide on Scams.”

Foy Shiver, Deputy-Secretary General of APWG, adds: “From my first call with Jorij Abraham, I was excited at the opportunity to work with an organization as passionate as APWG at making the cyber world a safer place for everyone. Collaborating on sharing threat data, producing networking events and now supporting the 10 recommendations presented today show how together we can improve security for every consumer worldwide.”

Source: Global Anti Scam Alliance
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April 20, 2023
Ayleen Charlotte (Tinder Swindler Victim) and AA419 Honored as Scam Fighters of the Year 2023

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The Global Anti-Scam Alliance has awarded the Scam Fighter awards of 2023.

Press Release
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Feb 2, 2023 14:30 CET

AMSTERDAM, February 2, 2023 (Newswire.com)
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Ayleen Charlotte, scam victim of the Tinder Swindler, was honored as ‘Scam Fighter Person of the Year’ 2023. AA419, which has been fighting online scams since 2003, received the Scam Fighter Award for ‘Best Scam Fighting Organization of the Year’ 2023.

The Scam Fighter Awards is organized annually by the Global Anti-Scam Alliance (GASA) together with ScamAdviser, to bring more attention to the importance of fighting online fraud worldwide. According to GASA, last year, more than $55 billion was lost by nearly 300 million consumers worldwide in online scams. As only an estimated 7% of victims report online scams to law enforcement, these numbers are only the tip of the iceberg.

Ayleen, Scamming the Scammer

The independent Jury, consisting of Donna Gregory (Unit Chief of the FBI Internet Crime Complaint Center), Mitchel Chang (Trend Micro), and Jayde Richmond (Executive Director, Scamwatch, Australian Competition and Consumer Commission), selected Ayleen based on several dozens of nominations from the law enforcement and scam fighting community as ‘Scam Fighter Person of the Year’ 2023.

Ayleen was a romance scam victim of Shimon Hayut, who scammed millions of dollars out of women he met through dating apps. Donna Gregory elaborates, “What makes Ayleen unique is that she not only came forward and reported the crime but also participated in the Netflix documentary Tinder Swindler to gain more attention to this horrendous kind of crime. She is a role model for other scam victims. Of course, the fact that she as a victim also scammed the scammer and was able to recover some of the money she lost utters respect, but this is something I would not recommend other scam victims to do.”

AA419, Fighting Scams for 20 Years

Artists Against 419 started listing fake banks in 2003 in a public database. Over the years, the database expanded to include other forms fraud. The core AA419 team has always been small but with a large fan base. The AA419 membership also includes members from other anti-abuse groups, working with AA419 to expose advance fee fraudsters in a central database.

The database allows scam victims to check a website. This list now contains ~157,000 entries will full data and is one of the world’s largest manually collected databases of fraudulent websites, making AA419 recognized for its expertise to identify scams by several law enforcement agencies across the globe.

Jury member Jayde Richmond commented, “AA419 is a research community that provides a valuable service to help tackle online fraud and scams. Its international group of members emphasizes that online fraud is best combated by cross-border cooperation.” Mitchel Chang added, “Trend Micro recognized AA419 as an excellent source for manually vetted scams. Their work is one of the many pillars many security companies rely on to keep consumers worldwide safe.”

Source: Global Anti-Scam Alliance

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February 2, 2023
Consumer and Expert Survey Reveals: No Country is Good at Fighting Online Scams
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Press Release
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Dec 8, 2022 14:00 CET
AMSTERDAM, December 8, 2022 (Newswire.com)
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The Global Anti Scam Alliance and ScamAdviser.com interviewed both 200 cybercrime experts as well as 4,430 consumers to determine which country is the best at fighting online scams. In short: it seems no country really deserves to be called “Best Scam Fighting Country of the World”.

The 200 experts, in general, believe their country is doing nothing (35%) or only a bit (48%). Only 7% consider their nation the best at fighting scams.

The 4,430 consumers likewise rated the performance of their country poorly. Remarkably, the top three best-performing countries are all developing nations: Indonesia, Bangladesh, and the Philippines. Consumers from Indonesia were the only ones who gave their country a “sufficient” 6.1 out of 10. The United Kingdom is listed in fifth place, followed by Canada and the USA falls in eleventh place.

Consumers could also rate their country on different aspects of scam fighting, including:
- Awareness building
- Offering tools to identify scams
- Ease of scam reporting
- Enforcement of scammers
The scoring differs little per category. Indonesia, Bangladesh, and the Philippines are listed each time in the top three. Australia was given a 5.9 for ‘Ease of scam reporting’, owning second place in this category with Indonesia rated as #1 and Bangladesh and the Philippines sharing third place.

The survey participants listed several reasons for the general poor scoring of their countries. When asked how their country can improve, five main areas for improvement were named.

The first focuses on building more scam awareness, especially via mass media such as TV and radio. Consumers especially want to see more concrete examples of the latest kinds of scams.

A second improvement often named is offering consumers more tools to identify or block scams, be it via phone (especially robocalls), email or websites. While in some countries commercial tools are being offered, not all participants stated having the financial resources to buy these or they believe that these should be offered by the government to protect all citizens.

Easier and more centralized reporting of scams is likewise often named. Several respondents stated that reporting of scams cannot be done online in their country. They feel that the police focus on protecting businesses and rich citizens. Some report being laughed at by the police or being told that it is their own fault.

The fourth action named is more strict, international legislation. Many participants call for a global dedicated police force combating online scams, especially regarding cryptocurrency schemes.

Finally, consumers state that social media should be held more accountable for advertisements of scammers. The same applies to banks. Finally, hosting companies and registrars should be named and shamed more publicly for supporting and even protecting scam sites, or be forced to apply to Know Your Customer (KYC) processes.

The full report can be found on GASA and ScamAdviser.

Source: Global Anti Scam Alliance
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December 8, 2022
How Businesses Can Combat Fraud and Increase Efficiency

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Opinions expressed by Entrepreneur contributors are their own.

“There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government.”

These words of wisdom from Benjamin Franklin have, unfortunately, proven timeless. People have been defrauding the government for centuries, but last month, the US hit an estimated $45 billion in COVID-19-related unemployment fraud. Now the government starts the long, costly and inefficient process of recouping the money, conducting investigations and punishing those responsible. This process is often called the “pay and chase” model.

With all that fraud, it can be challenging for government agencies and private companies to separate the wheat from the chaff (or, in this case, the fraud from the noise). For example, is a person calling your call center with a device you haven’t seen before actually an existing customer with a new phone or someone attempting to take over an account?

These issues create room for inefficiencies and cost companies huge operational sums when they cannot tell the difference. But, going too heavy with stricter verification that may dampen the customer experience is also something you have to avoid. The good news is it’s possible to identify fraudulent activity with modern technology better and thus increase efficiency.

Related: The Government Is Not Immune to Account-Takeover Fraud, and That Could Be Trouble for You and Me

Modern fraud and its noisy neighbor

At its core, the focus of fraudsters has remained on tricking people into giving access to as much money or data as possible. It’s nothing new; the term “con man” was likely coined in the 1800s. Whether it’s Bill Starbuck’s “The Rain Song” from the musical 110 in the Shade, where the charismatic con man convinces townspeople to give him money to make it rain and end a drought, or someone calling your grandmother and pretending to be a government agency, fraud has always been, and always will be.

Our ability to close fraud loopholes is improving. Still, fraudsters are constantly creating new schemes, and technology continues to enable them to get better at fooling us and covering their tracks. This requires businesses and the government to react to new trends quickly; the best defense against fraud is to be aware of the techniques, remain on guard and educate consumers to do the same. All the while, businesses and governments must walk a tightrope between restricting freedoms too much and being purely reactive to crime.

The public and private sectors utilize call centers for customer account issues and require telephonic calls for some account actions. Unfortunately, these call centers are very susceptible to fraud. The time customer service reps spend trying to distinguish between fraud and noise (i.e., the legitimate calls that get flagged as fraud) distracts from more critical business and carries high costs.

For example, in the financial services industry, the cost of fraud to businesses is $4 for every $1 of actual fraud. That means, on average, if a person defrauds $1,000 from a company, that business’s related costs will be $4,000. And this figure doesn’t include additional costs incurred if a fraudster secures enough information on their first attempt to follow up with more attempts on the same business or its clients, nor the cost of reputational damage post-attack.

One of the big problems, though, is that fraud and noise can often seem similar. For instance, imagine you broke your cell phone and got a new one. When you try to access your bank account from your new phone, your account gets flagged because it doesn’t recognize the device. Now, you have to call to unlock your account, and your bank needs to spend resources confirming your identity. This protects the consumer and the bank but introduces inefficiency for both parties.

Related: How to Identity Proof in an Increasingly Virtualized World

So, what’s an agency to do?

Is there a solution? Modern identity proofing continues to progress in leaps and bounds. The technology exists now to implement much better identity proofing that’s device-agnostic and uses powerful, behind-the-scenes algorithms to prove a customer’s identity — often without them even realizing what’s going on. Artificial intelligence (AI) helps us use data points across the web to calculate the risk associated with a person or caller and create a dynamic risk profile. Then, based on their risk level, they may be required to complete additional automated steps to log in to their account or conduct business.

There are more straightforward steps, as well. For example, impersonating the dead has long been a lucrative tactic for fraudsters. Years ago, criminals even got hold of the Social Security Administration’s (SSA) Death Master File, a restricted record with millions of people to impersonate. One of the first steps a company can take during the account creation process is to check the Death Master File. Every time a person initiates a request for money with an agency, a quick screening can be done to ensure the person requesting a payment from the government is not a dead person. That would be a sure sign something’s amiss.

Of course, there’s no end to the trickery. Recently, I watched in real-time as a phone-based scam targeted my stepmother. She received a text that appeared to be from a friend saying her email had been the target of a scam, and my stepmom should call a particular number to make sure hers hadn’t also been compromised. I had to explain that it wasn’t her friend texting but someone using her friend’s number.

Older people are especially susceptible to fraud like this, but scammers have discovered impersonating a government agency or some entity with authority is a winner. If we get a call saying we’re in trouble with a government entity, will we ignore it? Probably not — many of us will do exactly what they say.

Related: How Technology Can Improve CX for Government Services

A continuous process

We aren’t going to be able to screen out fraud completely. But we can get better at thwarting it, saving operational dollars and resources and providing good customer experiences. The greatest vulnerability in any system is usually the humans using it, so implementing more automated identity-proofing and anti-scam tools can help bridge the gap. We can build efficiency into our systems by keeping up with the latest scam trends and implementing adequate technical controls to stop them.

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Scott Straub

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November 29, 2022
New Survey Reveals 73% of Internet Users Are Targeted by Scammers

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Though 48% of the respondents admit to have fallen for a scam; 74% of consumers still think they can recognize scams before it is too late.

Press Release
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Oct 27, 2022 13:30 CEST

AMSTERDAM, October 27, 2022 (Newswire.com)
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According to research conducted by The Global Anti Scam Alliance and ScamAdviser of 3,500+ internet users, 73% of respondents are either sure or think that they have been exposed to a scam last year.

74% believe they can recognize scams; 48% fell for them

Similarly, this year’s survey has found a small increase of 3 percent, from 71% to 74%, of respondents that claim they can confidently identify a scam. In spite of this, however, 48% of respondents still fell for a scam. It is worth noting that this figure also bodes well for internet users given that in the previous year the reported figure was 67%, thereby illustrating a 19% improvement in victimization from the previous year.

Investment & Crypto Scams are the most reported

The types of scams that internet users were confronted with in the past year have notably changed, with cryptocurrency (28%) being the most popular, followed by unexpected promises of money (22%) and phishing (22%). In terms of the frequency of exposure, the results from the two surveys were notably similar with reported figures of 43% and 42% respectively in 2022 and 2021.

Consumers still rely on outdated methods to check for scams

In terms of how internet users check the safety of websites, unsafe methods such as “checking for an SSL certificate” have increased from 5% to 12% whilst checking for reviews has declined from 41% to 26%. This might serve as an indicator that internet users are putting less faith in online reviews given the increasing problem of fake reviews.

Consumers report scams less; especially to the police

In terms of where internet users report their negative online experiences there has been a drop in the use of review websites from 21% to 15% and reporting to the national police remains the least popular option at 6%.

Furthermore, 46% of respondents choose not to report scams with the most popular reason being that they do not know who to report to (25%), that the process seems too complicated (17%), and general apathy in terms of their opinion that reporting victimization would not in their eyes make a difference (14%).

Lastly, one of our most significant findings is that the respondents still rate police and government efforts in combatting scams as poor. In fact, this figure has increased from 64% in 2021 to 72% in 2022.

On the 9^th and 10^th of November, GASA will organize the Global Anti Scam Summit to identify new solutions to fight the rise of scams.

The report Why do Consumers get Scammed can be downloaded here.

Contact: jorij.abraham@gasa.org

Source: Global Anti Scam Alliance

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October 27, 2022
69% of Scam Victims Make No Effort to Recover Their Money

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Press Release
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Jun 30, 2022

AMSTERDAM, June 30, 2022 (Newswire.com)
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The Global Anti Scam Alliance and ScamAdviser surveyed 2,575 consumers from across the world asking them about their experience with trying to get their money back from scammers.

Curiously, most of the victims have reported being from Asia (39%) and Africa (32%). This goes to show that not only do several scams originate in those places, but scammers may be victimizing more people domestically than internationally.

Most money is lost to Investment Scams

Investment scams (40%) seem to be the most common scams that consumers are getting trapped in. This is followed by Shopping Scams (15%), Money Recovery Scams (13%), and Job Scams (10%). Consumers are also losing money to Subscription Scams (7%), Romance Scams (5%) and Phishing (4%).

Individual losses are not large but seriously impact victims

Most of the survey participants lost less than $100 (32%). 11% lost a huge sum of money ($5,000 to $10,000) and 7% did not lose any money. However, 66% said that getting scammed had a significant negative impact on their finances.

Victims lost money majorly through Cryptocurrency

The payment methods most favored by scammers are Cryptocurrency (29.8%) and bank transfer (21.1%). Scammers also favor Credit Card (12.4%) and Electronic Money Transfer (11.9%).

68.8% of the victims did not try to get their money back

Not only did most victims not try to recover their funds, but it was also further reported that 66.1% of the victims who tried to recover their money failed to get it back.

Even those who recovered their money were not always able to get the entire amount back as 14.4% said that they only got a partial refund. It is interesting to note, however, that more consumers were successful at getting a full refund (19.4%) than a partial refund (14.4%).

Most victims do not know how to get their money back

The main reason cited for not attempting to get a refund is that the victim did not know how to get their money back. A considerable portion also said that they did not try to recover the money as they did not think they would get it back even after trying (31.5%).

Victims first approach the scammer for a refund

Among the consumers who did try to get their money back, they did so by approaching the scammer (31.9%) and their bank (28.3%). 16.7% approached the crypto exchange while 10.7% sought the help of money recovery services. Only 7.7% reported it to law enforcement. 3.4% tried taking legal action.

40.1% agreed that getting money back from the scammer was easy

On the brighter side, only 39% disagreed that it was easy to recover their money after being scammed.

The full article and report can be downloaded from GASA.org and ScamAdviser. Contact: jorij.abraham@gasa.org.

Source: Global Anti Scam Alliance

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June 30, 2022