Why most people fall for fraud and scams and how to protect yourself

Before I can explain anything, what is fraud? Simply, this is a wrongful or criminal deception intended to result in financial or personal gain. What is a scam? Well, this is a deceptive scheme or trick used to cheat someone out of something, especially money.

All through the pandemic, there has been a rise in fraud and scam cases worldwide, with increased activity across most industry sectors utilizing both traditional tactics and rapid growth in digital fraud.

People and enterprises have seen both external and internal changes as a result of economic pressures, making them prone to exploitation.

The continuing disruptions and economic insecurity has led to desperate measures to sustain profits while also allowing fraudsters to prey on weakening systems and safeguards.

Why is there a rise in fraud and scams?

1. A changing e-commerce landscape and the advent of new marketplace platforms – One of the trends influencing the surge in fraud is the migration of retail purchases online. Card not present transactions, in particular, have increased considerably in recent years. As a result of COVID-19, more consumers stayed at home, and more trade migrated online. Even when businesses resumed operations, the new normal remained. This tendency has made it increasingly easier for bad actors to commit fraud.Most consumers have put their trust in marketplace companies with their bank information, and fraudsters have modified their strategies to capitalize on increased in-app and online marketplace sales.
2. Banking services are becoming increasingly computerized – Customers today expect greater online and mobile services from their financial institutions. As a result, historic banks are digitizing. They are doing more online account onboarding and transaction approvals and less in-person transactions, making it increasingly difficult to verify identities. In response to consumer demand, a new breed of “challenger banks” has developed, born and doing business solely online, and distinguishing themselves by providing simple-to-use and digital-native services. Most of these banks don’t ask for much of your data and as you would expect, less data means a greater risk of fraud.
3. Changing consumer expectations – Consumers today also expect their data to be protected. However, any transaction that takes too long, requires too much data, or is too complex will be abandoned. Most customers demand a quick, seamless experience that is also as trustworthy and secure as feasible. Because of these high expectations, banks and retailers must balance minimizing losses with preventing fraud detection measures from rejecting good consumers and transactions. Cybercriminals recognize the challenges that these firms confront and prey on those who fail to strike the correct mix of safe, yet frictionless client experiences.
4. Technological advancement – Because of the rise of e-commerce, mobile payments, and computational power, fraud has also risen and become more complex. Many of the same technology that businesses rely on to innovate and quickly launch new products and services are also used by fraudsters. Criminals can perpetrate fraud more readily using cheap, on-demand compute resources or machine learning algorithms that are more nuanced and capable of influencing fraud detection systems. Traditional rules-based fraud detection systems, on which businesses have relied for years, are increasingly unable to keep up.
5. FOMO (the fear of missing out) – With COVID-19, so many innovations came up, most of them complex but promising lucrative returns. Cryptocurrency is an example here. Data from the Federal Trade Commission (FTC) shows that more than 46,000 consumers have reported losing over $1 billion in cryptocurrency to scammers since the beginning of 2021, accounting for around one out of every four dollars reported lost, more than any other payment method. People are generally concerned about passing up an opportunity, possibly for “the next big thing.” And if such a “offer” is only available for a limited time, the scarcity principle says that people are more likely to be drawn to it.When the freedom to do something is endangered, people prefer to react swiftly to avoid missing out. When presenting financial opportunities, scammers will imply that the deal is only active now and will be gone as soon as they put the phone down. Many people would believe that they simply cannot afford to pass up such an opportunity.

With all of these reasons contributing to the rise of digital fraud, it may appear as if the odds are stacked against you.

How do you safeguard yourself?

1. Make use of a passcode on your phone – When you think about it, your smartphone is a hacker’s holy grail of personal information. Are you going to be out of town? It’s on your calendar. Do you require bank account numbers? They’re available on your banking app. Do you want to change your account password? It is possible to do so by email. This should be enough to convince you to password secure your phone, which is one of the simplest ways to protect yourself. You can also configure the ability to remotely remove data from your phone. If it is lost or stolen, you can take precautions to keep your data safe from hackers, even if they are able to crack your passcode. Setting up a phone passcode is a no-brainer.
2. Be cautious while clicking on email links – The phishing fraud is one of the most heinous out there. You get an email that appears to be from your bank, credit card provider, or a major corporation you probably do business with online, such as Apple, Amazon, or Netflix. The email informs you that you must change your payment details in your account and offers you with a convenient link to do so. You click on the link, visit the website, and enter your credit card or social security number. The issue was that that wasn’t the actual site. It was a bogus website set up by hackers to persuade you to hand up the products. Nothing is more disheartening than discovering that you willingly gave your personal information to a thief. What is the best defense? Instead than clicking on links in email messages, go directly to the company’s website and follow the instructions from there.
3. Make use of strong passwords – When hackers seek to find your password to a website or computer, they don’t try every possible password combination for hours on end. Instead, they rely on powerful computer programs to generate hundreds of thousands or even millions of words as well as other letter and number combinations. You will not be able to outwit the machines by using “1234” as your password, no matter how brilliant you believe you are. Instead, create passwords using upper- and lowercase characters, symbols, and numbers. Longer passwords are more secure, and a random string of characters is optimal. You can get ideas from online password generators, and many even include a handy mnemonic device to help you remember it. Also remember not to use one password for all.
4. Be cautious about public networks – Open Wi-Fi hotspots are popping up everywhere, from your doctor’s office to your favorite restaurant. While the allure of free, fast internet cannot be denied, these networks have a serious flaw: they are not secure. A clever network hacker can easily deceive your phone or computer into exposing everything you do online, including passwords, credit card numbers, and other sensitive information. When using a public network, avoid purchasing online or accessing password-protected sites such as your bank accounts or email. If you need to access a secure site, utilize your cell phone network instead than the Wi-Fi network.
5. Keep up to date – Hackers will always figure out how to acquire people’s data, and then technology companies come up with a solution. The ‘bad guys’ find another way in, which leads to another remedy, and so on indefinitely. One way that technology companies address these breaches is by updating operating systems, apps, online browsers, and so forth. Only if you install the updates will you be protected. Using old software is like to leaving your back door open for crooks to come in and take whatever they want. You can configure your phone or computer to automatically install updates when they become available, ensuring that you are always utilizing the most recent version.
6. Limit the amount of personal information you share online – Hackers don’t always need to use sophisticated technologies to get access to your accounts. If a site asks password recovery questions to get access, the hacker may be able to obtain the correct answers online. Password recovery questions commonly asked include your high school mascot, the brand and model of your first car, your mother’s maiden name, and so on. Some or all of these answers may be readily available on social media sites or via a quick Google search.
7. Stop and talk to someone you trust. Before you do anything you are not sure of, ask someone — a friend, a family member, a neighbor. Talking about it could help you realize it’s a scam.