Visa Survey Shows that Only 60% of Individuals Indicate Experiencing Payment Fraud
A new report reveals that payment fraud is a common issue in Germany, with approximately 18% of consumers reporting falling victim to payment fraud and 54% of adults experiencing at least one scam attempt in the last year [1][3]. Despite this, only around 60% of those affected actually report payment fraud to the authorities, indicating that the true prevalence might be underrepresented [3].
The most common fraud methods related to payments and financial scams in Germany include shopping scams, fake invoices, phishing and fake payment requests, telephone scams targeting older adults, and real estate scams [2][3].
Shopping scams represent the largest category, affecting 55% of scam targets. These typically involve paying for products or subscriptions that never arrive or turn out to be fake [3]. Fake invoices affect 45% of scam targets and involve fraudulent billing to trick victims into making unwarranted payments [3]. Phishing and fake payment requests are common, with scammers using fake messages posing as delivery services, banks, or other legitimate entities to steal payment information or trick users into transferring money [3].
Telephone scams targeting older adults, such as the "grandchild trick" and posing as police officers warning targeted victims of supposed threats requiring handing over valuables or cash, are also prevalent [2]. Real estate scams, where fraudsters posing as brokers ask for down payments or fees without delivering legitimate property contracts, are another concern [2].
Large-scale tax-related fraud schemes like Cum-Ex and Cum-Cum have caused massive financial damages to Germany, with losses estimated near €29 billion between 2000 and 2020 alone [5].
Respondents are more skeptical about paying by QR code, as used in supermarket apps. Only 37% find this method secure [1]. However, half now feel secure paying with a smartphone or wearable (50%) [1].
Almost two out of ten Germans have already encountered an attempt at investment fraud [1]. Security remains the most important factor for respondents when paying, with the importance increasing with age [1].
92% of respondents expect to be informed by their own bank about security when paying and current fraud methods [1]. Regular updates on fraud forms (60%) and tips on handling suspicious account activities or debits (58%) are particularly sought after [1].
In 2023, only 37% of respondents felt secure paying by QR code [1]. Six out of ten Germans have received fake messages from alleged banks [1]. More than half of Germans have heard of investment fraud [1]. Newer forms of payment fraud include fraud with fake financial and cryptocurrency offers [1].
Sources:
[1] Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (2023). Payment Fraud in Germany. Retrieved from https://www.bdv.de/presse/pressemeldungen/2023/payment-fraud-in-germany
[2] Bundesamt für Sicherheit in der Informationstechnik (2022). Fraud Awareness: Common Scams and How to Protect Yourself. Retrieved from https://www.bsi.bund.de/EN/Topics/cyber/fraud_awareness/fraud_awareness_node.html
[3] Bundesverband der Deutschen Banken (2022). Payment Fraud Report. Retrieved from https://www.bdb.de/presse/pressemeldungen/2022/payment-fraud-report
[5] Bundesministerium der Finanzen (2020). Cum-Ex and Cum-Cum: A History of Financial Fraud in Germany. Retrieved from https://www.bmf.de/SharedDocs/DE/Artikel/IA/Cum-Ex-und-Cum-Cum-eine-Geschichte-finanzieller-Betrug-in-Deutschland.html
Other industries, such as technology, could potentially collaborate with the finance sector to develop more secure payment methods and alert systems, reducing the risk of payment fraud. This collaboration could help minimize the prevalence of scams like shopping scams, fake invoices, phishing, and other fraudulent activities.
The finance industry could also benefit from learning best practices from other industries to enhance digital security measures and prevent large-scale tax-related fraud schemes like Cum-Ex and Cum-Cum, which have caused significant financial damages in Germany.
