Visa's annual report warns against the latest sophisticated scam tactic "digital skimming"

In the past six months, financial fraud through physical consumer transactions in shopping malls has resurged. Criminals exploit consumers' exposed personal information during payments to purchase gift cards, physical goods, or steal card numbers for transfers.

Traditional pickpockets used to steal personal belongings and physical credit cards. Now, a new form of theft combines traditional pickpocketing with online fraud, not only stealing physical cards but also digital assets and cryptocurrencies, leaving consumers completely drained.

According to the latest press release from Visa, consumers' digitally exposed personal information leaked during mobile payments has been stolen by fraud groups, resulting in substantial monetary losses. With the upcoming peak season for shopping and travel towards the end of the year, consumers should be vigilant in protecting their personal information and digital wallets in crowded places such as airports, restaurants, or shopping centers.

Michael Jabbara, Visa's Global Head of Fraud, told Fox Business that consumers need to be cautious of "Digital Pocketing" scams. In this type of fraud, criminals approach consumers using mobile payments, allowing them to surreptitiously access the digital wallet on their phones for payments without the victims' awareness.

New Sophisticated Scams Revealed in Visa's Annual Report

Mobile Payment and Digital Online Payment Scams

The new sophisticated scams include thieves stealing from consumers' mobile wallets for mobile payments. Fraud groups target users who do not use two-factor authentication through phishing scams, using AI-generated emails to trick users into revealing their online passwords for fraudulent activities.

Fraud groups create fake airlines or booking websites, enticing consumers with fake discount promotions and even sending fake flight cancellation emails to trick them into providing payment information to book new flights.

Impersonation Scams

Fraud groups impersonate government officials and public servants globally. Many consumers fall victim to impersonated IRS, FBI, and postal service officials. In the first three months of 2024, the total illicit amount from impersonating U.S. officials exceeded $20 million, with an average loss of $14,000 per consumer.

Gas Station Scams

Fraudsters first authorize small fuel charges on an account, then use an account with insufficient funds for large fuel purchases. These scams targeting gas stations are prevalent in the U.S., the Caribbean, and even in the Middle East and Europe, spreading globally.

Enumeration Attack Scams

Cybercriminals breach merchants' payment systems to obtain account information through large-scale detection and mathematical enumeration to determine the scale and speed of payment systems. These scams, known as "enumeration attacks," mainly target restaurants, government agencies, and charitable organizations.

Password Provision Scams

Fraudsters illegally obtain financial verification codes and cash out under financial institution supervision. Visa notes that cybercriminals deliberately delay cashing out after obtaining passwords to evade detection by financial institutions.

Ransomware Scams

Ransomware attacks on cloud and web hosting services and third-party providers increased by 24%. Third-party providers are the main targets for cybercriminals, affecting an estimated 2,620 organizations and 77 million individuals.

How the General Public Can Prevent Digital Identity Theft

Travelers on vacation should remain vigilant in crowded places where attention can easily be diverted, making it easier for personal belongings to be stolen. Consumers can set up instant notification alerts for their accounts, receiving real-time communication for every transaction made, including where and how much was spent. If any suspicious or unauthorized charges are noticed, consumers can immediately report them to the issuing financial institution, protecting themselves and others from falling victim to fraud.