A Torrance resident, Kim, received a text about a class action lawsuit against his vehicle.
The text said the model was defective and he could receive thousands of dollars in compensation for a small attorney’s fee. He believed it and sent $300. Even though he waited, he never received any money. He checked the bank account he had sent the money, but it said it no longer existed. Then he realized it was a scam.
A Korean American resident in Fullerton, Choi, recently received an email from Amazon. It said his personal information had been compromised and he needed to re-enter his payment information. He followed the link in the email to a website and entered personal information, including his username and bank account number. He later noticed that someone had purchased $500 worth of items through his Amazon account. He realized that his account had been hacked through the information he provided.
Consumers need to be vigilant as digital scams are on the rise. According to cybersecurity firm BioCatch, the number of digital financial frauds reported by North American financial institutions through the third quarter of this year has increased tenfold compared to last year.
“Criminals used to try to breach security systems, but now they’re targeting consumers,” said Tom Peacock, Director of Global Fraud Intelligence at BioCatch. “Digital scams targeting consumers are on an upswing because it’s easier.”
In a survey of 7,000 adults by cybersecurity firm Fsquare, 85% of respondents said they had experienced an attempted digital scam in the past year. That means more than 8 in 10 people have been exposed to fraud. Forty-one percent of consumers say they experience fraud attempts every week, showing that the problem is pervasive. Thirty-six percent said attempts have increased since 2023.
Thirty-four percent said they had been a victim of financial fraud. That’s up 7 percentage points from 2022. One in four victims said they lost money from the scam.
Experts attribute this to the fact that digital money transfers are easier than ever before, leading to a rise in related scams. Money transfer scams using apps like Venmo and Zelle are on the rise as well. In 2023, fraud losses through Zelle reached $166 million, and this is expected to grow even higher this year.
Financial institutions, including Korean American banks, are taking steps to prevent such fraud.
Bank of Hope explains how to prevent fraud using business email on the front page of its website. It warns users to be wary of scams that ask for money transfers from emails claiming to be from well-known companies.
“We are taking a variety of measures to prevent our customers from falling victim to fraud, including sending warning messages to customers about suspicious wire transfers,” said In Young Park, Senior Vice President and Marketing Manager at Bank of Hope.
Big banks like JPMorgan Chase, Bank of America, and Wells Fargo have also recently announced plans to enhance their fraud protection after being warned by the Consumer Financial Protection Bureau (CFPB).
Experts advise consumers can avoid falling victim to fraud by avoiding calls from unknown numbers, avoiding clicking on suspicious emails, calling a trusted organization to verify information before sending money, and confirming the identity of the recipient before sending money.
BY WONHEE CHO, HOONSIK WOO [woo.hoonsik@koreadaily.com]
