Financial Crime World

Brazil Sees 2.8 Million Fraud Attempts per Minute in Electronic Channels: Study

Staggering Rate of Fraudulent Transactions in Brazil’s Financial System

A recent study by fraud prevention and digital security company CAF has revealed that Brazil is experiencing a staggering rate of fraudulent transactions in its financial system. According to the research, there were approximately 365 million fraud attempts in digital financial channels alone during the first quarter of 2023, with a total of 2.8 million attempts per minute.

Peak Time for Fraudulent Transactions

The study analyzed evidence of attempted fraud in various areas, including financial services, mobile environment, and e-commerce. The highest rate of fraudulent transactions was found to be in the financial services sector, accounting for 1.73% of digital transactions during the period.

  • Interestingly, the survey results show that the peak time for fraudulent transactions is between midnight and 5am, with a fraud rate reaching as high as 3.47% at 3am compared to the total volume of transactions in that hour.
  • The study also highlighted the increasing sophistication of fraud attempts, including the use of biometric recognition systems and facial spoofing techniques.

Growing Adoption of Digital Payment Methods and Increased Availability of Personal Data Online

Experts attribute this surge in fraudulent transactions to the growing adoption of digital payment methods and the increased availability of personal data online. “Digital ecosystems are interconnected, which adds to the complexity of prevention,” said Vanita Pandey, CAF’s chief marketing officer.

The situation has prompted concerns among financial institutions and legal experts alike. According to Marcos Vinicius Silva Cardoso, a lawyer specializing in financial market causes, the number of consultations for possible legal actions against fraud has already exceeded 30% of the volume of the entire 2022.

  • Tom Canabarro, CEO of Konduto, an anti-fraud analysis company, warned that the emergence of new technologies such as instant payment systems like Pix have accelerated the growth of fraudulent activities.
  • Cardoso cited a recent example of a Ponzi scheme where scammers offered victims returns of up to 200% on their investments.

Investment Sector Also Affected

In the investment sector, fraudsters are also exploiting digital channels, using cryptocurrencies and fake investment schemes to dupe unsuspecting victims. According to Cardoso, one such scheme saw a client invest $20,000 in a fake crypto investment scheme, only to be told they had to pay fees and taxes before withdrawing their money.

Conclusion

As Brazil continues to digitize its financial landscape, authorities and financial institutions must remain vigilant in detecting and preventing fraudulent transactions to protect consumers from falling victim to these scams.