Last month the FBI published their latest IC3 2023 Internet Crimes Report which, as always, makes for interesting reading. The report highlights the continued growth in both volume and value of scams (or authorised frauds) and that this is a clear and present danger to be tackled.

Key points:

· Total reported losses up 21% to $12.53bn

· Total reported cases up 10% to 880,418

· Investment Scams now top by value at $4.57bn up 38%

· Phishing still the top by volume, but downward trend continues

· Cryptocurrency related crime reports* now $5.5bn

There are some important changes that the report identifies.

The top five crimes by value are now:

1. Investment Scams $4.57bn

2. BEC $2.9bn

3. Tech Support $0.92bn

4. Personal Data Breach $0.74bn

5. Confidence/Romance $0.65bn

Adding the tech support and government impersonation together (they are very similar MOs) takes impersonation to number 3 at $1.3bn.

What is clear is a further massive increase in the impact of cryptocurrencies making up 86% of the investment scam losses and totalling 44% of all the losses in some way.

Reviewing the age statistics, whilst the loss value for er age groups is much lower, the volume of cases is on a par across all but the under 20’s. This reflects a number of factors: Younger age groups having less funds, targeted by lower loss per case typologies, such as purchase scams, rather than a investment, lower reporting rates in younger age groups.

It’s clear that all age groups are vulnerable and require support to reduce the number falling for scams and fraud. Targeting different messages at different age groups both form an educational point of view and from within fraud detection systems is a key response to this trend.

There are successes in the fight though. The IC3 report highlights the success of the Recovery Asset Team (RAT) process introduced in 2018 having a 71% Success Rate, freezing $538m in 2023.

At CYBERA we’re a big fan of RAT and CYBERA VSRTM supports RAT by providing law enforcement, as well as beneficiary organisations, by providing intelligence on frauds and scams, once the victim has reported to CYBERA.

What needs to be done to tackle the scams menace?

This is a multi-faceted problem and therefore requires action across the ecosystem. Initiatives are required right across the flow of scams, from the root causes, such as a fake ads on social media, right, through to the cash out phase.

· Government, regulators and firms must do more to limit the enablers; much can be achieved through greater data sharing:

• Stop abuse on platforms, whether social media, dating aps or ad platforms

• Telcos and messaging apps to restrict spoofing and fake users, and ensure blocking is enabled

• Monitoring of fake sites and take them down fast.

· Law Enforcement Agencies to take a more proactive approach to help freeze and repatriate assets and utilise public/private data sharing to take and intelligence led approach to disruption.

· Alignment of incentives across the public and private sectors to take the investment and actions required, as a number of UK laws and regulations have already started to do.

What can you do to help reduce the threat to your customers and institution?

· Provide tailored warnings to your customers and staff to raise awareness

· Assist victims to report efficiently and fast as quicker reporting increases the chances of freezing, recover, repatriation

· Obtain details of known mule accounts, crypto wallets and their personas to increase prevention and detection, whether as a platform, fanatical institution or corporate

Collectively these actions can prevent onboarding customers or client as scammers, reduce the level of funds sent to scammers or onward transmission between mule accounts. Together this reduces the impact on all of us, lowered losses, increased recoveries and fewer funds in the hands of organised criminals.

Click here to see how CYBERA’s solutions can help you protect your customers and yourselves from the impact of scams

*Other crimes involving Cryptocurrency and cryptocurrency wallets