Rising losses from digital fraud demand a joint approach

The total losses resulting from phishing (6.1 million euros) and bank helpdesk fraud (16.5 million euros) amounted to just over 22.5 million euros in the first six months of 2021.

By way of comparison, the losses from these forms of fraud totalled 39.5 million euros for the whole of 2020. Losses from fraud and scams in payments are therefore rising further to an alarmingly high level. Banks therefore wish to press ahead, working with the government and other parties to develop a comprehensive approach to combating digital fraud.

Thanks to additional security measures and the fact that fewer physical payments were made due to the coronavirus pandemic, the losses from more traditional forms of fraud involving credit cards and stolen debit cards fell sharply. For example, losses from credit card fraud halved to just over one million euros, whilst losses from stolen debit cards fell by 68% to 940,000 euros.

Over 90% of losses reimbursed

In the case of phishing, 98 per cent of the losses were reimbursed by the banks. In 2020, banks decided to reimburse losses resulting from bank helpdesk fraud as a gesture of goodwill, as number spoofing exploits customers’ trust in their bank. As customers also bear some responsibility in this regard, banks have drawn up assessment criteria to determine the extent to which losses will be reimbursed. In the first six months of 2021, 92 per cent of losses resulting from bank helpdesk fraud were reimbursed.

A comprehensive approach is essential

Digitalisation offers great convenience and new opportunities, but it also has a downside. The rise in digital crime is a widespread societal problem. This can only be tackled collectively, i.e. with the cooperation of all relevant public and private parties. Banks have long been advocating for a comprehensive approach. They wish to join forces with, amongst others, the relevant ministries, regulators, the police, the Public Prosecution Service, social media platforms, big tech companies, internet service providers, telecoms operators and trading platforms. The Cyber Security Council has also called for action and investment to reverse the trend of rising digital fraud. Further delay means more harm to victims and greater profits for criminals.

Prevention and detection

Pending such a joint approach, banks continue to do everything in their power to keep payments secure. This is essential because criminals are devising ever-cleverer scams. Examples include the IBAN Name Check (name-number verification), the option to set payment limits, two-factor authentication and the so-called ‘immediate transfer’ service. Customers of online marketplaces can use the latter to ensure their transactions are carried out securely. In addition, there are many mechanisms, invisible to the outside world, that protect consumers against fraud and scams. Banks use various fraud detection systems to identify and investigate fraudulent transactions. Banks also continuously alert their customers through direct communication (for example, via the app) and through campaigns on social media, radio and TV . In doing so, banks pay particular attention to vulnerable groups such as the elderly and young people.