Financial Crime World

Cyber Fraud Surges in Vietnam: Protecting Businesses and Data Privacy in a Digital Age

Amid the rapid digitalization of the Vietnamese economy, the nation has seen a disturbing uptick in cyber fraud incidents, threatening both local and foreign entities with substantial financial losses. In this article, we shed light on the current state of cyber fraud in Vietnam and offer valuable guidance for businesses to fortify their defenses against these malicious actors.

Cyber Fraud in Vietnam: A Growing Concern

According to the Global Anti-Scam Alliance (GASA) report released in 2023, Vietnam ranks second among developing countries in terms of economic losses due to scams 1. With an astounding VND 91.8 trillion (USD 16.23 billion) in losses, equating to 3.6% of the nation’s GDP, Vietnam is a prime target for cybercriminals. Records from the Department of Information Security under the Ministry of Information and Communications reveal a 65% increase in online fraud cases between the first six months of 2023 compared to the same period last year 2.

A Wide Range of Sophisticated Cyber Fraud

Vietnam’s flourishing economy, ongoing digital transformation initiatives, and less-stringent regulations have attracted foreign investment and businesses. Sadly, this has made the country a fertile ground for cybercriminals. Over the years, cyber fraud in Vietnam has evolved, with more sophisticated and elaborate scams causing immense financial damage and endangering the data privacy of individuals and businesses 3. Surprisingly, victims of cybercrime not only encompass those within Vietnam but also foreign entities engaged in business activities in the country.

Common Forms of Business Cyber Fraud

Vulnerable businesses, both domestic and foreign, have increasingly become preferred targets for cybercriminals due to their large transactions. A few popular tactics used by these malicious actors to ensnare businesses include:

  • Phishing: Scammers trick victims into revealing sensitive information, usually through emails, text messages, or phone calls.
  • Business Email Compromise (BEC): Cybercriminals hack into business email accounts and impersonate the owner, requesting payment transfers from unsuspecting partners, vendors, or employees.
  • Vendor or supplier fraud: Criminals infiltrate vendor or supplier databases and manipulate invoices, causing financial losses or compromising the supply chain.
  • Ransomware attacks: Criminals encrypt essential data and demand a ransom, threatening the business with costly downtime unless they comply.

Staying Ahead of Cybercriminals: Regulatory Framework and Enforcement

Vietnam’s regulatory framework to combat cyber fraud includes the 2015 Criminal Code and Decree 144. The Criminal Code stipulates penalties for cybercrimes under Articles 290 and 174 4, while Decree 144 outlines administrative penalties for violating regulations against cybercrimes. Collaborative efforts between the Criminal Police Department (C02) and the Department of Cybersecurity and High-Tech Crime Prevention and Control (A05) have proven effective in addressing cyber fraud 5. Handling a cyber fraud case in Vietnam involves several stages: investigation, gathering evidence, issuing warrants, and the judicial process 6.

Conclusion: Combatting Cyber Fraud in the Digital Age

The increased sophistication and professionalism of cybercriminals necessitate proactive measures for businesses to guarantee their data privacy and safeguard themselves against cyber fraud. Precautions include:

  • Diligent email screening: Implementing rigorous email filters and training employees to recognize and report suspicious emails.
  • Verification of unfamiliar bank account transactions: Immediately verifying any unusual transactions to ensure they originate from authorized parties.
  • Timely reporting of cyber fraud incidents: Reporting cyber fraud incidents to law enforcement and the appropriate authorities without delay.
  • Seeking legal advice: Consulting with local attorneys to determine the best course of action when facing cyber fraud.

By remaining vigilant and adopting a multi-layered approach to cybersecurity, businesses can deter cybercriminals and minimize their exposure to potential financial and reputational harm.

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Footnotes

  1. Global Anti-Scam Alliance (GASA) report: https://gasacenter.net/en
  2. Ministry of Information and Communications, Department of Information Security: https://www.thongtin.gov.vn/
  3. Cybercrimes in Vietnam: https://www.bloomberg.com
  4. Vietnam’s Criminal Code and Decree 144: https://vietnamlawmagazine.vn
  5. Vietnamese authorities’ efforts to combat cybercrime: https://www.reuters.com
  6. Handling a cyber fraud case in Vietnam: https://www.lexology.com