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New online investment scams are no longer phishing attacks impersonating real companies; the company name, registration details, and promised high returns are completely fake.
“The risks here are completely different,” explains Robert Duncan, vice president of product strategy at Netcraft. “The funds involved in the success of the campaign are [thousands of dollars] Victims knowingly send money in connection with a scam. Depending on the jurisdiction, banks may treat this quite differently than authorized payments made in other types of fraud. ”
Duncan added that online investment fraud poses a significant threat to consumers and institutions, although they vary in size and impact. Duncan said that while individual consumers often bear the brunt of the financial losses from such fraud, financial institutions face risks such as reputational damage if there is impersonation or stakeholder impact. He said there is a possibility.
“The landscape is also changing in some jurisdictions, raising expectations that banks are now more likely to suffer losses from such fraud,” Duncan explained. “Collaboration with regulators and industry partners is essential to thwarting this threat.”
Netcraft researchers noted in a March 13 blog post that online investment fraud is emerging as a global threat. These scams promise very high returns without any risk and often claim to provide investors with a “once in a lifetime” opportunity that guarantees a profit overnight. Researchers say that when purporting to trade foreign exchange, cryptocurrencies, or other high-risk assets, unsuspecting investors (victims) profit by simply making an initial payment. I pointed out that it is possible. These guarantees are meaningless, the claimed investments are shams, and victims lose their money.
The numbers show that these scams are on the rise. According to data released last month, the Federal Trade Commission (FTC) said investment fraud accounted for more than $4.6 billion in U.S. fraud losses in 2023, more than any other fraud category. Also, the FBI’s 2023 Internet Crime Report noted that investment fraud was “again the most costly crime type tracked by IC3.”
“Fake trading platforms build entire ecosystems, including sophisticated websites and financial dashboards, to mimic genuine investment opportunities,” said Ted Miraco, CEO of Approov. states. “This approach makes the scam very convincing because it involves interactive elements such as manipulated trade results and fake customer support, rather than simple impersonation or false claims.” Masters are now leveraging the same marketing innovations as high-tech startups, except the end product is financial loss and deception.”
Leveraging bots and AI to deceive investors
These scams are characterized by the use of bots to simulate group chats with fake experts, creating the illusion of a legitimate investment opportunity, said Hokhunt co-founder and chief executive. CEO Mika Aalto explained. Aalto said this attack combines our trust in and use of social media with our natural tendency to trust authority figures, seek group approval, and seek easy rewards. He said that. Peer pressure tactics have long been used at multi-level marketing events and shady timeshare real estate dinners. There, participants engage in events, build a sense of community, and put pressure on them to take action.
“Unlike traditional identity fraud, these schemes create an entire ecosystem of deception, offering not only false promises but also a false community and support system,” Aalto said. “This sophisticated approach to cybercrime highlights the dangers of combining psychological manipulation with the lure of large financial gains, making it a particularly powerful threat. In the future, bots that follow scripts will The use of AI-powered bots will make it even more difficult for these communities to expose themselves as scams.”
Krishna Vishnubhotra, vice president of product strategy at Zimperium, says these types of scams are successful because they have a convincing message, a realistic-looking financial application, and a combination of their desire to get rich overnight. It is said that this is because it uses the ability to abuse. The threat of online investment fraud will only increase as mobile devices, messaging and social apps become ubiquitous in daily life, giving scammers continued access to potential victims, Vishunbhotla said.
“Mobile platforms allow scammers to cast a wide net and target specific individuals, which is truly frightening,” Vishnubotra said. “Replicating legitimate financial applications and distributing them via phishing or third-party stores is easier than ever today. Fraudulent schemes such as these will spread rapidly. The efficiency and reach of these scams will increase as cybercriminals can perform sophisticated social engineering tactics and interact more directly and persuasively with individuals. Masu.”
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