In 2023, Singapore saw a significant increase in online scam cases, with 46,563 reported incidents, marking the highest number since tracking began in 2016. This figure represents a 46.8 per cent increase from the previous year. In total, scam victims in Singapore lost US$651.8 million in 2023, a slight dip from the US$660.7 million lost to scammers in 2022.
Notably, malware scams emerged as a new concern, with 1,899 cases reported and SG$34.1 (US$25.1) million lost, highlighting the evolving tactics used by scammers. These figures underscore the ongoing challenge of combating scams in Singapore, with over SG$2.3 (US$1.7) billion lost to scams since 2019.
Why do people believe scammers?
There are five reasons people fall victim to scams:
Financial desperation
Financial desperation often becomes a significant factor because individuals are facing economic hardship or seeking quick financial solutions. Scammers capitalise on this desperation by presenting schemes that seem like a lifeline out of financial difficulty.
In Singapore, job scams topped the list of scam types, with 9,914 reported cases and losses totalling at least SG$135.7 ( US$100.1) million. E-commerce scams followed closely, experiencing a more than twofold increase in 2023 with 9,783 cases and losses amounting to at least SG$13.9 (US$10.3) million. Investment scams also featured prominently, with 4,030 cases and losses totalling SG$204 (US$151.5) million.
Trust in technology
The other reason individuals fall for scams is an implicit trust in technology. As we become increasingly reliant on digital platforms for communication, transactions, and information, scammers exploit this trust to their advantage. The belief that technology is inherently secure can lead individuals to overlook warning signs and engage in risky online behaviours.
The ubiquity of social media and online platforms creates an environment where individuals may be more willing to click on links, download files, or share personal information, inadvertently opening the door for scammers to exploit their trust.
Psychological manipulation
Scammers are adept at psychological manipulation, preying on basic human emotions such as fear, greed, and urgency. Whether through enticing offers, alarming messages, or fabricated scenarios, scammers create a sense of urgency that clouds individuals’ judgement. The desire for financial gain or fear of missing out often overrides rational thinking, making individuals more susceptible to falling for scams.
Also Read: Securing tomorrow’s finances: Navigating the rise of digital banks with cybersecurity
In the digital world, social engineering tactics play a pivotal role as scammers exploit personal relationships and glean information from social media to establish a false sense of trust. This tactic makes it challenging for even the most vigilant individuals to discern between genuine and fraudulent communications.
Lack of digital literacy
A significant contributor to falling victim to scams is the lack of digital literacy among users. As technology evolves, scammers continually develop sophisticated methods to deceive individuals. Those who are not well-versed in recognising online threats may inadvertently expose themselves to scams.
Educational initiatives on digital literacy are crucial to empowering individuals with the knowledge to identify red flags, distinguish authentic communications from scams, and protect their personal information online.
Sophistication of scams
Scams have evolved from simple phishing emails to highly sophisticated operations, including malware attacks and social engineering techniques. The increasing complexity of scams makes it challenging for individuals to stay ahead of the threat landscape. Scammers exploit vulnerabilities in software, manipulate trusted platforms, and adapt their tactics to stay one step ahead of security measures.
Why are scams bad for business?
Scams are detrimental to businesses for several reasons:
Reputation damage
Involvement in or victimisation by scams can tarnish a company’s reputation. Scams erode trust and confidence in the business, damaging its reputation and credibility. When customers fall victim to scams associated with a particular business, they are likely to lose trust in its integrity and may avoid engaging with the business altogether in the future. This loss of trust can lead to a significant decline in customer loyalty and ultimately impact the business’s bottom line.
Financial loss
Scams often result in direct financial losses for businesses. Additionally, dealing with the aftermath of scams, such as addressing customer complaints, providing refunds, and implementing security measures, incurs financial costs and consumes valuable time and resources that could otherwise be allocated to growth and innovation.
Legal consequences
Scams expose businesses to legal consequences, particularly when customer data is compromised. In such instances, businesses may encounter legal actions, regulatory fines, or other penalties. The association with fraudulent activities can result in legal repercussions and regulatory scrutiny, further damaging the company’s image and potentially leading to fines or legal actions. Consequently, scams pose a serious threat to businesses by undermining their reputation, financial stability, and legal standing.
How to avoid being scammed online?
Insufficient cybersecurity invites identity theft and financial losses as scams target both money and personal information. Vigilance is key – understanding their tactics and knowing how to respond is crucial for individual consumers, not just large corporations. Take proactive steps to protect yourself.
Stay informed and educated
Keep yourself updated on the latest scams and tactics employed by fraudsters. Stay informed through news articles, official announcements, and cybersecurity resources.
Verify information
Be cautious of unsolicited emails, messages, or phone calls. Verify the legitimacy of the communication by contacting the organisation directly using official contact information rather than using the contact details provided in the suspicious message.
Also Read: Navigating cybersecurity: Antivirus vs endpoint protection
Use strong passwords
Create strong, unique passwords for your online accounts, and avoid using the same password across multiple platforms. Consider using a reputable password manager to generate and store complex passwords securely.
Enable two-factor authentication (2FA)
Implement 2FA whenever possible. This adds an extra layer of security by requiring a second form of verification, such as a code sent to your mobile device, in addition to your password.
Be sceptical of unsolicited requests
Be cautious when receiving unexpected requests for personal or financial information. Scammers often pose as reputable organisations seeking sensitive details. Verify the legitimacy of such requests independently.
Monitor bank and credit card statements
Regularly review your bank and credit card statements for any unauthorised transactions. Report any discrepancies to your financial institution promptly.
Use reputable antivirus software
Install and regularly update reputable antivirus and anti-malware software on your devices. This helps protect against malicious software that scammers may use to compromise your system.
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This article was first published on March 12, 2024
The post Why do people fall for online scams in this digital age? appeared first on e27.