THE increased sophistication of online scams has been highlighted by the chief executive of the Channel Islands Financial Ombudsman amid “explosive” growth in the number of fraud-related complaints seen in recent years.
Speaking ahead of international Ombuds Day today, principal ombudsman Douglas Melville said that fraudulent schemes now lacked the “obvious signs” that used to give them away.
Mr Melville – who took up his role in 2015 – raised similar concerns in the latest CIFO annual report, which cited “explosive growth in the number of complaints involving losses due to fraud”.
“In addition, the nature of fraud complaints demonstrates a variety of underlying types of attack and systemic issues that raise significant questions for industry, regulators, dispute resolution bodies like CIFO, and the general public,” the report stated.
Mr Melville said: “Post-Covid, everyone in my line of work worldwide is dealing with an explosion of fraud complaints.
“Depending on how you measure it, over a two-year period, we saw a 195% increase in fraud complaints. But actually, if you were more selective about the timeframe, you could calculate it at over 1,000%.”
He continued: “The bad guys have figured out how to make money, so they’re going to plough their capability into it.
“The question is, are we getting smarter? We’re bombarded with information online. It used to be the scams would come with my bank’s logo but the colour was wrong and the language was awful.
“Those obvious signs are gone. Now the logo is perfect, the font is right, the English is clean – and you believe.”
Earlier this year, Jersey Cyber Security Centre director Matt Palmer warned Islanders about criminal groups using artificial intelligence to bolster their online scams, which he said would “likely increase in sophistication”.
And the former head of the Joint Financial Crimes Unit, Barry Faudemer, recently expressed concerns over the lack of a safety net for Jersey residents in relation to authorised push payment (APP) fraud.
This usually involves a fraudster tricking someone into authorising a transfer or sharing banking details that result in a scam payment that appears legitimate.
Mr Faudemer pointed to protections available in the UK, which has implemented a reimbursement scheme requiring payment firms, including high street banks, to refund most victims of APP fraud for qualifying transactions – with a maximum claim amount of £85,000.
