From Ransomware to Pig Butchering, Visa Report Shows Top Scams Impacting Consumers and Businesses Globally

Rhea-AI Summary

Visa's Spring 2024 Threats Report highlights the increasing sophistication of scammers targeting consumers, with a focus on leveraging emotions to create fraud opportunities. The report emphasizes Visa's commitment to combating these threats through significant investments in technology and innovation.

Insights

Cybersecurity Analyst

Visa's report on the evolution of scams underscores a significant shift in the threat landscape, particularly in how threat actors are leveraging emerging technologies like Generative AI to craft more convincing scams. This trend is not only a concern for individual consumers but also has implications for businesses that rely on digital transactions. The sophistication of these scams, such as 'pig butchering', where victims are emotionally manipulated into fake investments, reflects a higher level of organization among cybercriminals.

The increase in the amount of money lost despite a decrease in the number of reports suggests that scammers are becoming more effective at targeting and extracting larger sums from fewer individuals. This could lead to increased operational costs for companies like Visa, as they may need to invest more in advanced fraud detection systems and consumer education initiatives to counteract these threats. The direct impact on consumer trust and the potential for reputational damage to payment processors can also have indirect financial implications.

Furthermore, the fact that a significant portion of scams goes unreported highlights a concerning gap in data, which can hinder the effectiveness of countermeasures. Businesses must consider both the technological and human elements of cybersecurity, as the human factor is often the weakest link in security chains.

Financial Analyst

The acknowledgment by Visa of the escalation in scam sophistication and the subsequent financial losses is a critical factor for investors to consider. Visa's proactive stance, characterized by a $10 billion investment in technology and innovation, is indicative of the company's commitment to maintaining the integrity of its payment ecosystem. However, this also reflects the escalating costs associated with combating fraud.

From a financial perspective, the ability of a company to effectively mitigate such threats is important for maintaining consumer confidence and safeguarding transaction volumes. Visa's report may reassure investors of the company's dedication to risk management, potentially impacting its stock valuation positively. However, it's important to monitor how these increased costs affect the company's bottom line and whether they can be offset by Visa's innovation-driven growth.

The report may also serve as a bellwether for the broader financial services industry, indicating a need for increased vigilance and investment in cybersecurity measures. Companies that fail to adapt to the evolving threat landscape may face competitive disadvantages and potential regulatory scrutiny.

Consumer Behavior Specialist

The insights provided by Visa's Threats Report have significant implications for understanding consumer behavior in the face of evolving scams. The psychological tactics used by scammers, such as exploiting heightened emotions during holidays, are particularly effective and represent a shift in how consumers need to be educated about fraud.

The increased effectiveness of scams suggests that traditional consumer warnings may no longer suffice. Instead, there is a need for more sophisticated consumer education programs that address the emotional and psychological aspects of scams. This is essential for maintaining consumer trust in digital payment platforms.

Moreover, the reluctance of consumers to report scams could be indicative of a stigma associated with being a victim of fraud, or a lack of awareness of the importance of reporting. Visa and similar companies could benefit from encouraging a more open dialogue about scams, normalizing reporting and providing clear, accessible channels for consumers to report fraud. This could not only help in data collection and scam prevention but also strengthen the relationship between consumers and financial service providers.

Visa highlights a more savvy scammer in its Spring 2024 Threats Report

SAN FRANCISCO--(BUSINESS WIRE)-- Today, Visa released the Spring 2024 Edition of its Biannual Threats Report, which outlines the top payment threats impacting consumers and businesses around the world. The report points to increasingly organized, sophisticated threat actors targeting the most vulnerable point in the payments’ ecosystem: humans.

“With the use of Generative AI and other emerging technologies, scams are more convincing than ever, leading to unprecedented losses for consumers,” said Paul Fabara, Chief Risk and Client Services Officer, Visa. “Visa is uniquely positioned to address these threats, with investments in tech and innovation reaching over $10 billion over the past five years. These investments, in addition to our ongoing education and top talent, allow us to stay ahead of scams and protect consumers.”

Individuals as a Primary Target

Consumers are increasingly targeted by scammers, who rely on heightened emotions to create fraud opportunities. While the number of individual scam reports from June to December decreased, the total money lost increased, indicating scammers are targeting victims with more effective – and costly – scams. According to another recent Visa survey, more than one-third of adults surveyed decided not to report scams committed against them¹, suggesting the losses are higher than reported.

Top consumer scams highlighted in the Spring Threats report include:

• “Pig butchering” scams: Capitalizing on holidays like Valentine’s Day and New Year’s Eve through social media and dating sites, scammers lure victims into online relationships and convince them to invest in fake cryptocurrency trading platforms. Leveraging AI to create more convincing campaigns, pig butchering scams have led to billions of dollars of losses for consumers². Per Visa’s study, 10 percent of surveyed adults have been targeted in a pig butchering scam¹.
• Inheritance scams: Victims are notified about an inheritance left by a long-lost relative, often coming from a seemingly legitimate law firm or other professional entity. Red flags include secrecy, urgency, requests for personal information, and the need for an initial payment to secure future gains. 15 percent of U.S. adults surveyed by Visa have been targeted in inheritance scams¹.
• Humanitarian relief scams: Capitalizing on tragic current events, these scams exploit calls for donations across social media to defraud unsuspecting donors.
• Triangulation fraud: Threat actors create illegitimate online storefronts offering in-demand products at a low cost to collect payment information. Legitimate merchants fulfill the online order, but payment information is already compromised. Triangulation scams cost merchants up to $1 billion in a single month³.

“Visa has a dedicated team that works around the clock globally to monitor and disrupt the tactics bad actors use to commit fraud,” said Fabara. “With our average time between identifying and shutting down an attack measured in minutes versus hours or days, we are doing all we can to help keep consumers safe. We hope building awareness of these emerging scams will help consumers fight fraud as another line of defense in the battle against fraudsters.”

Increasingly Organized Fraud Operations

In addition to cardholders, threat actors are continually probing organizations and networks for complex weaknesses, leveraging new technologies to exploit vulnerabilities with far-reaching impacts.

Organizational fraud trends impacting the ecosystem include:

• Supply chains and third-party services are increasingly targeted with campaigns designed to maximize the impact of a single breach.
• Artificial Intelligence (AI) has been increasingly adopted by fraudsters, allowing them to identify vulnerabilities within fraud controls implemented by banks.
• Purchase Return Authorization (PRA) fraud attacks increased 83 percent over the previous five-month period, with each successful attack leading to approximately $115,000 in potential fraud losses to banks.
• Ransomware cases increased 300 percent from June to December 2023 when compared to the same period in 2022. Visa forecasts that ransomware threat actors will continue to target critical infrastructure, including financial organizations.

Through the close integration of people and technologies, Visa has developed processes to mitigate and prevent payments ecosystem attacks. Visa engages with all payment ecosystem participants to ensure any at-risk data is identified and impacted stakeholders are notified.

To read more of the report, visit visa.com/security. To find out more about the tools Visa uses to help organizations of all sizes fight fraud, visit the Intelligent Security page.

About Visa

Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.com.

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1		Consumer Scam Report, Visa and Morning Consult, March 2024
2		US Financial Crimes Enforcement Network, September 2023
3		FS-ISAC, Holiday Shopping Threats, 2023

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240320282456/en/

Media Contact

Meg Omecene

momecene@visa.com

Source: Visa Inc.

FAQ

What does Visa's Spring 2024 Threats Report focus on?

Visa's report focuses on the top payment threats impacting consumers and businesses globally, highlighting the targeting of individuals by organized and sophisticated scammers.

Who is quoted in the press release regarding the threats report?

Paul Fabara, Visa's Chief Risk and Client Services Officer, is quoted in the press release discussing the impact of scams on consumers and Visa's efforts to address these threats.

What is one of the top consumer scams highlighted in the report?

One of the highlighted scams is the 'Pig butchering' scam, where scammers use social media and dating sites to lure victims into fake cryptocurrency trading platforms, resulting in significant financial losses for consumers.

How much has Visa invested in tech and innovation to combat threats?

Visa has invested over $10 billion in technology and innovation over the past five years to address payment threats and protect consumers.