The internet has given us innumerable advantages – but digital connectivity also brings with it many risks. And as significant portions of our lives move online, from shopping and travel bookings to banking and investments, the likelihood of being targeted by scammers increases. As digital technology offers us new ways to connect with the world around us, so too are scammers using these avenues to find new extortion victims.
What is financial fraud?
Financial fraud occurs when money or other financial assets are stolen from you through the use of deceit or criminal activity. Fraudsters typically seek to gain your trust and then ask for money. To be able to win your trust, they may masquerade as bank officers, government employees or simply, private individuals in need of funds.
How financial fraud occurs
As in the physical world, it is essential to stay ahead of scammers to avoid being hit by financial fraud.
The first step is understanding the different routes that hackers use. These include both physical and electronic methods:
- Telephone calls
- SMS or text messages
- Social media channels
- Snail mail
- Personal meetings
For the purpose of this article, we will focus on the electronic methods used to commit financial fraud in the UAE.
Five types of financial fraud
Fraudsters use a variety of established scenarios to part their victims from their money. These may include offering non-existent cash prizes, phony bank alerts and potentially lucrative investment schemes. Almost all seek to either obtain your money – either directly via a transfer, or indirectly by using your bank account details.
This article presents an overview of the five most common financial scams.
The fraud: Your money is at risk
Scammers turn our instinct for protecting our assets against us with one of the most common phishing cons. Typically, a scammer masquerading as a bank or government official who is contacting you to advise that there is a problem with your bank or investment account and that your funds could be blocked without immediate action. You’ll then be asked to share your log-in credentials or OTP details with the scammer or by clicking on a link that takes you to a very genuine-looking web page. You may even be asked to provide personal details, such as your date of birth or mother’s maiden name. Except that once you’ve shared your details, your money will most likely be transferred to the criminal’s account.
The fraud: A secret investment opportunity
There’s an old adage that if something is too good to be true, it usually is. That’s the case with the investment scam. You may be offered a chance to make a lot of money very quickly perhaps by investing in coronavirus vaccines, property in another country or even government bonds.
After filling out official-looking documentation, you will be asked to make a bank transfer or send a cheque to the scammer’s account – which may be in the name of a fictious or fraudulent company. You’re unlikely to ever get your money back. On investigation, you could well discover that the opportunity in question never existed or that the conman had no authority to represent the company in question.