Financial Crime World

Financial Losses from Specialized Fraud in Japan Surge for the First Time in Eight Years

Alarming Increase in Fraud Cases and Financial Losses

According to the Japanese Police Data, there was a 31.5% increase in financial losses from specialized fraud in Japan during 2022. This marks the first rise in financial losses from this type of crime in the last eight years. The total financial losses reached an alarming $37.1 billion. The number of reported cases also increased by 21.2%, totaling 17,570.

Key Findings

  • 6,640 cases of fraud were recorded, a marginal increase from the previous year
  • 2,458 offenders were involved, 84 more than in 2021
  • Concerningly, 473 of the offenders were younger than 20

Specialized Fraud in Japan

Specialized fraud, also known as telemarketing fraud, is a type of crime where criminals illegally gain the trust of victims through phone calls and defraud them by convincing them to wire funds to specified bank accounts.

Fraud Cases by Region

  • Tokyo: 3,218 cases (a decrease of 101 from the previous year)
  • Kanagawa Prefecture: 2,090 cases (an increase of 629)
  • Osaka Prefecture: 2,064 cases (an increase of 526)
  • Chiba Prefecture: 1,710 cases (an increase of 354)
  • Saitama Prefecture: 1,365 cases (an increase of 305)
  • Hyogo Prefecture: 726 cases (an increase of 215)
  • Aichi Prefecture: 462 cases (an increase of 106)

These seven prefectures accounted for around 70% of all fraud cases in Japan.

Financial Losses from Specialized Fraud

  • Daily financial losses: $101.6 million (an increase of $24.3 million from 2021)
  • Average financial loss per crime: $2.2 million (an increase of $166,000 from 2021)

Common Types of Fraud

The most common type of fraud was ‘refund fraud’, with 4,679 cases. In this scam, fraudsters attempt to defraud victims by promising to reimburse them for medical bills or insurance premiums.

The second most common type was ‘ore ore sagi’ or ‘it’s me’ scams, where criminals impersonate family members and gained $12.9 billion, representing around 35% of the total fraud proceeds.

The third most common type of fraud was ‘cash card scams’, in which criminals obtained a cash card from an elderly person and replaced it with a fake card.

Prevention and Education

The rise in financial losses due to specialized fraud underscores the importance of remaining vigilant against potential scams and wary of requests for funds sent over the phone or the internet.

It is also crucial for law enforcement to step up efforts to combat fraud and to educate the public about the different types of fraud and how to prevent them.

References

  • Japanese Police Data
  • Translation: Google Cloud Translation.