Five emerging fraud types in APAC identified for 2023

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Callsign has predicted 2023 will be another year of fraud with emerging ‘new’ fraud vectors causing further erosion of digital trust in banks, telecoms, social media, e-commerce platforms and other digital providers. 

Looking forward to 2023 and based on customer interactions and conversations with security experts in both the public and private sectors around the world, Callsign predicts the following:

1: Dormant account takeovers become mule accounts

Dormant accounts occur when consumers do not access their online accounts for a long period of time rather than closing them. These dormant accounts are just what fraudsters like to use in the laundering of funds received from illegal activities. 

fraud experts
Chris Stephens

By recruiting mules through deceptive social media posts and ads, phishing and easy money scams, these dormant accounts are then used for illegal purposes.

“Fraudsters manipulate mules by asking them to receive money and make purchases or send funds to other accounts. Bank accounts that suddenly switch from being inactive to active do raise red flags, but it is the account holder who will be punished if caught rather than the perpetrator in most cases. We predict 2023 will see a sharp rise in dormant account takeovers by fraudsters using mules,” said Chris Stephens, Solutions Engineering, Callsign.

2: The rise of Buy Now, Pay Later (BNPL) fraud

The rise of Buy Now, Pay Later (BNPL) companies across the region all share similar characteristics i.e. they all offer convenience, interest-free payments, encourage purchases, flexible repayments, and fast account opening approval. Yet they are all prone to fraud found in the retail sector.

“In the race to attract customers and win market share, some BNPL companies have forgone standard security protocols to the extent that crypto exchanges have better controls as a whole. We predict 2023 will begin to see BNPL exposed to friendly and refund frauds, accounts opened with stolen credentials, bot attacks and more,” said Stephens.

3: Deep fake technology growth

Deep Fake technology is already being used by scammers to get people to buy things through, for example, impersonation, visual identification and more.

“Sadly, we predict deep fake technology fraud will escalate partly because there are few tools on the market that can identify, counter, and stop these frauds. The technology is rapidly evolving, and the prediction is that it will be used to defraud the public on a scale similar to other sophisticated frauds.”

4: Enter player 2 with the dodgy identity in the Metaverse 

The metaverse has the potential to allow people to connect, collaborate and interact for learning, socializing, and doing business thanks to Web 3.0 allowing seamless connectivity across platforms, hardware and networks. Unfortunately, it has all the potential to go the same way as the current online world, which is riddled with fakes and fraud. 

“Everything wrong from a security perspective with social platforms today will be considerably worse in the metaverse of tomorrow. If the metaverse is open to all in one giant decentralized world, how are people going to be protected from digital compromise?”

5: New cycle of victims

Despite fraudsters running rampant across all industries with a large scam playbook, 2023 will see a new population of people who have never fallen victim to fraud before. These may be people switching into environments where security is lax or targets of sophisticated and personalized attacks.

“According to Callsign’s Digital Trust report, consumers in the Asia Pacific region have higher levels of digital trust than in other regions. If we are to see a more positive outlook in 2024, much more needs to be done to protect consumers by the public and private sector,” concluded Stephens.

Related article: Old-fashioned fraud was simple, today’s a very different story

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