Scams to watch out for in 2023

Fraudsters looking to make a quick buck are everywhere these days, and the situation is expected to get worse. Credit reporting agency Experian predicts the threat of fraud will surge in 2023 as swindlers try to capitalise on economic uncertainty.

That would build on a pandemic-related increase in financial deception of people who were stuck at home and conducting most of their transactions online. In the United States alone, there were over 2.8 million fraud reports in 2021, with consumer losses totalling more than US$5.8 billion (S$7.6 billion) – a whopping 70 per cent more than 2020.

In an increasingly digital world, it can be hard to tell what’s real and what’s fake as scammers come up with more sophisticated schemes, said Ms Kathleen Peters, chief innovation officer at Experian Decision Analytics.

Here are five fraud threats to be wary of in 2023, according to Experian’s Future of Fraud forecast.

Bogus text from the ‘boss’

As many people continue to work from home, Experian anticipates an uptick in employer fraud texts.

This scheme typically involves a fraudster impersonating a boss. That “boss” asks the employee to purchase a gift card, then steals the card, leaving the individual or company with the bill. If you are asked to send the card codes and details via e-mail, consider it a red flag.

Fake job postings

As layoffs hit every sector

from tech to finance, job seekers should keep an eye out for fake remote-job postings. Experian warns that scammers may try to solicit private information such as a social security number or date of birth for a job that will never materialise, and then use that information to commit identity theft.

Job hunters should also exercise caution if a remote employer asks employees to reship goods or move money through personal bank accounts. You could be involved in what Experian calls a “mule scheme”, unwittingly helping to move stolen goods or launder money.

Phoney retailers

If you are an avid mobile shopper on Facebook Marketplace, it is buyer beware. Social media commerce fraud could spell millions of dollars in losses for consumers in 2023, Experian says.

While shopping apps were designed to make online purchases more accessible and intuitive, many platforms lack identity verification and fraud detection measures. That makes shoppers on the platforms an “easy target” for fraud. 

Online payment problems

Online payment services have exploded – and so have scammers on their platforms. Sending digital money is often “instantaneous and irreversible”, making the platforms ripe for fraud.

Experian warns that consumers may be duped into sending money to fake retailers for items that never materialise. Experian advises never to get tricked into giving out your account credentials – you could be enabling scammers to send your cash to themselves. 

Fake customers

Retailers beware. Scammers are making up identities entirely. The sophisticated financial crime involves a scammer creating fake personas using both real and false information to open lines of credit.

The swindler will often max out credit limits with no intention of ever repaying the debt. The scammer can open multiple lines of credit across retailers or add stolen payment cards to accounts. 

The increasingly popular scheme, known as “synthetic identity fraud”, is the fastest -growing form of financial crime in America, according to the Federal Reserve. Experian anticipates that new iterations of this scheme will bypass and outsmart fraud controls and spell major losses for retailers. BLOOMBERG