Be on the scam lookout this holiday season: FICO
By Corey Smith, Executive Partner for Client Success – Australia, FICO
Money is tight and the hunt for holiday bargains is on. No one wants their hard-earned to be wasted on paying top price if they can help it, especially since it feels like the price of everything has gone up. Banks are warning their customers to be extra vigilant in the lead-up to the holidays, and well they should. Social media streams are rife with ads that may or may not be from legitimate vendors. Fraudulent emails are more convincing than ever. Now there’s a smartphone virus that allows cyber criminals to pop a fake interface over a real banking app to steal information and funds.
Vulnerability: Real-Time Payments
We anticipate that real-time payment fraud will make the problem of holiday scams even tricker. As the cash is transferred nearly instantly, victims don’t have a window of time to reverse the payment once they realise they have been deceived by an illegitimate business or fake website. Fraudsters proceed to swiftly launder the money through a maze of accounts, making it hard to trace.
When customers send money through this payment mode, they’re unlikely to get it back.
The Australian Securities and Investment Commission (ASIC) is working to implement a cross-industry code that will hold banks, telcos, and social media platforms responsible for scam safety and make them liable to reimburse people who lose money through scams.
In the meantime, and even with such codes in place, Australian holiday shoppers must be careful.
Australian Tech Journalist Trevor Long caught up in Social Media Scam
These schemes are often executed by taking advantage of people’s tendency to click on what may look like an attractive deal for highly sought-after goods or fake delivery notifications with a phishing link. Such scams come in many forms. We recently spotted Australian tech journalist Trevor Long seemingly endorsing a deal on a new gaming product over on TikTok, only to have Long confirm that a clip from one of his review videos – including his likeness and his product recommendation – was being used fraudulently in social media ads on multiple platforms. For many, Long is a trusted voice with helpful advice to guide holiday shopping. In a LinkedIn video, Long shared that a viewer of his was duped by the ad and it’s highly unlikely he’ll receive any product at all, let alone the one offered in the ad. Long has taken steps to have the ads removed, but they keep popping up again.
Given the strong desire to find the best bargains, shoppers are vulnerable to such scams inviting them to make purchases from online retailers from which they’ve never purchased before. However, the items may be counterfeit products, or worse, may not arrive at all.
To avoid falling prey to schemes, consumers should take preventative measures to protect themselves against festive fraud. For instance, they should be selective and shop on official websites or mobile apps where possible. When making purchases on third-party platforms, it’s always a good idea to cross-reference with official sources if a deal seems too good to be true.
In the case of the social media ad that used Long’s video without permission, the price of the product was suspiciously low. A few minutes of online research revealed the true price was over $1000 more than the ad was offering.
Banks have a Responsibility to Customers
However, even with the best precautions, savvy consumers are still vulnerable to being exploited. Financial institutions have an added responsibility to their customers and a role to play in taking a proactive stance in mitigating consumers’ risks.
It’s great to observe banks engaging in customer education regarding scams and the collaboration between Australian banks on the new Scam-Safe Accord is impressive. Continued education on the safe use of payment cards and digital banking credentials will be valuable.
There are new advances in artificial intelligence models that can help financial institutions protect their customers by spotting uncharacteristic spending behavior or significant transactions that may be unauthorised. It’s also important to have intelligent two-way communication with customers that can reach them in any channel whether it’s SMS, email, phone call or via an app alert. This builds trust with the consumer that the bank is able to help prevent likely fraud and is involving them in confirming what is legitimate and what might be a scam.
