Cyber-enabled fraud is rapidly expanding in scale and sophistication as criminals exploit digital platforms, instant payments, and virtual assets to move illicit proceeds across borders, an intergovernmental watchdog said on Tuesday.  

The Paris-based Financial Action Task Force (FATF) concluded in a new paper that 90 percent of the jurisdictions it assesses now explicitly identify fraud as a major money-laundering risk. The watchdog organization said that Singapore alone has seen a 61 percent rise in the number of cyber-enabled fraud cases over a 2-year period. 

“While the total estimate of fraud losses including against individuals, businesses and to the detriment of public finances is impossible to quantify, it reaches at least into the tens of billions of dollars a year in the United States alone,” FATF wrote in the report. 

The global trend has been driven in part by the rapid adoption of digital technology that was accelerated by the Covid-19 pandemic, FATF said. The rise in digital payments and the emergence of AI tools, including AI-enabled deepfakes, have allowed fraudsters to deploy scams that make use of cloned websites, social-media ads, messaging and payment apps, and phishing, the organization said. 

Large-scale cyber-fraud can often be linked to transnational organized crime group and so-called “scam centers,” according to the report The criminals behind such schemes typically attempt to disguise their illicit money flows from the outset, through the use of nominee accounts, money-mule networks, and the use of fintech apps, among other techniques. 

In the paper, FATF urged member-states to strengthen how they detect and fight cyber-enabled fraud, including through improved payment transparency, tighter oversight of virtual asset service providers, greater data-sharing in public-private partnerships, and improved beneficial-ownership standards for shell companies and other legal entities. 

Read more at FATF