Scams are increasing globally, both in number and in sophistication. More people than ever are falling victim to scams, across all ages and demographics. It’s vital to understand the different types of scams to be able to spot and prevent them.
What is the Definition of a Scam?
A scam is a deceptive scheme designed to trick individuals or organizations into giving away money, personal information, or access to accounts. It relies on manipulation, impersonation, or false promises to create a sense of urgency or trust. The scammer’s goal is always to benefit at the victim’s expense.
Is a Scam the Same as Fraud?
Scams and fraud overlap, because they both involve unfair gain and deceit, but they are not the same. Fraud is the crime of deceitfully taking someone’s money, in which the criminal gains access to the victim’s account, while scams are the tactics that a fraudster uses to coerce customers into sending money to them. In a scam, the victim initiates the money transfer, wire, Zelle transaction, or check themselves, not realizing they’ve been scammed.
What Types of Scams are There?
There are many different types of scams, using different tactics and targeting different groups of people. Some scams combine multiple tactics, like an elder scam that includes a pig-butchering scam.
What are Authorized Push Payment (APP) Scams/Mobile Payment Scams?
APP scams occur when victims are manipulated into sending money to a fraudster’s account, often using mobile payments like Zelle, PayPal, or Venmo, or online banking. Scammers use urgency, fear, or false authority to convince victims the payment is necessary. Because the payment is customer-authorized, it can be difficult to reverse.
What are Bank Impersonation Scams (Phishing, Smishing, Vishing, QR-Phishing, Bank Staff Impersonation)?
These scams involve criminals impersonating the bank or bank staff in order to have customers move their own money to a “safe, new bank account” – or a similar ploy designed to have the customer unwittingly move money into the criminal’s hands. The same techniques are also used for Account Takeover (ATO) schemes, but in a scam scenario they are not used to collect login or sensitive details – but rather to push victims into making payments. It can take place through phone calls (vishing), emails (phishing), text messages (smishing), or fake QR codes (QR-phishing). Messages or calls often claim urgent issues, like suspicious activity or account blocks, to create panic, or involve scammers posing as members of the bank’s fraud team.
What is Business Email Compromise (BEC)?
BEC is when criminals impersonate a company executive, employee, or supplier, via email, to authorize fraudulent payments. The messages often look highly convincing and use urgent language to convince an employee or colleague to bypass normal checks and approve the payment. Businesses may unknowingly send large sums directly to the fraudster’s account.
What are Check Overpayment Scams?
This scam is common in personal sales and small business transactions. It’s when scammers send a counterfeit check for an amount higher than agreed, and then ask the victim to refund the excess. The original check later bounces, leaving the victim out of pocket.
What are Invoice Scams?
Invoice scams targets businesses by tricking them into paying fake invoices or changing the bank details they have for their suppliers. Criminals often intercept real communications or imitate trusted vendors, or use a tactic like BEC. Payments appear legitimate, but they are silently diverted into accounts controlled by the scammer.
What are Loan & Credit Scams?
In loan scams, scammers pose as legitimate lenders offering guaranteed or fast approval for loans. They demand upfront fees, personal data, or both, and then disappear without providing any loan. Victims may end up in a worse financial position than before, harm their credit rating, and be exposed to identity theft.
What is Money Mule Recruitment?
Money mule scams involve convincing people to transfer or receive stolen funds through their own accounts. Fraudsters use job ads, social media, or online messages to make the activity sound legitimate. Mules can face serious legal consequences, even if they did not realize they were helping criminals.
What are Elder Scams?
Elder scams target older adults to exploit their perceived isolation, confusion, or trust to steal money or personal information. They usually use the same tactics as other scams, like fake service providers, fake tech support, investment scams, and romance scams. They often involve high-pressure sales tactics or play on the victim’s emotions.
What are Child-in-Distress & Friend-in-Distress Scams?
Scammers impersonate the victim’s grandchild, child, friend, or someone close to them, claiming to be in urgent trouble and needing money immediately. They rely on secrecy, fear, and emotional manipulation to push victims into acting without verification. These scams often use stolen details or AI-generated voices to sound convincing.
What are Pig-Butchering Scams?
Pig-butchering scams are a type of investment scam that continues for a long time. It’s called a “pig-butchering” scam because the victim is slowly fattened up, before the scammer strikes to take all their money. Long-con scammers build trust through social media or dating platforms and slowly introduce victims to fake investment schemes. They show small, staged “profits” to encourage larger deposits. Once enough money is invested, the scammer disappears and the platform collapses.
What are Romance Scams?
Scammers invest a lot of time into building a fake emotional relationship to earn a victim’s trust, typically using a fake identity. Communication is often done remotely, although can be done face to face as well.
Sometimes they go as far as suggesting marriage or a civil partnership. They tell the victim that they urgently need money for an emergency or pressing issue like paying off debts. This could involve small amounts that gradually get larger, or one large amount after they have convinced the victim that the relationship is real.
What are Charity Scams?
Scammers pretend to represent real charities, or create fake ones to solicit donations. They often appear after disasters or crises, using emotion and urgency to pressure victims into giving money. The funds never reach any legitimate cause.
What are Government Impersonation Scams, Tax Scams, & Benefits Scams?
Fraudsters pose as tax agencies, benefits offices, or law enforcement representatives, claiming the victim owes money or must provide information. They use threats, urgency, or official-looking messages to appear legitimate. Payments or details sent to the scammer can lead to financial loss and identity theft.
What are Home Repair & Doorstep Scams?
Scammers approach victims offering urgent home repairs, inspections, or maintenance work, often targeting older adults and people living alone. They use pressure tactics, fear, or fabricated hazards to push for immediate payment, but the work is unnecessary, poor-quality, or never completed. Once money is handed over, the scammer disappears or leaves the victim with substandard work and often damage to their home.
What are Investment Scams & Crypto Scams?
Fraudsters promise high, guaranteed, or fast returns to lure victims into fraudulent investments. Crypto scams often involve fake platforms, manipulated dashboards, or pressure to “act now.” Victims may lose substantial amounts of money for an opportunity that never existed. Pig butchering scams are a subset of investment scams.
What Trends are There in Scams?
2025 saw a number of important trends in scams. The biggest scam trend is the use of GenAI to write personalized scam content like phishing emails and smishing texts; AI bots that scale up scam attacks; and AI-powered deepfakes that convincingly impersonate someone’s voice over the phone or face on a video call.
Partly thanks to AI, scams are also becoming more elaborate. Scammers use AI to quickly produce authentic-looking fake websites that add to the pretense by making the claim look real. Scams are more likely to involve cross-channel journeys, like email plus SMS plus a fake website, to make them more convincing.
Additionally, mobile payment scams and online banking scams are increasing, because scammers know that they are harder to reverse.
Global Scam Statistics
Data from across the world shows that scams are rising. The Global Anti-Scam Alliance (GASA)’s Global State of Scams 2025 report found that 57% of adults worldwide have been scammed in the past year, with the shopping scams (54%), investment scams (48%), and unexpected money scams (48%) as the most common types of scam. Research by Mastercard showed that 80% of global consumers received a scam attempt in the last year.
Research carried out by American Banker on behalf of Refine Intelligence reveals that 76% of financial institutions have seen the volume of scams rise in the past year, while 70% have also seen an increase in the value of customer losses and 63% have seen bank losses rise.
A report by KPMG into global banking scams revealed that retail and business bank accounts are the top targets for scammers, with attackers preferring digital platforms like internet and mobile banking. KPMG reported that ecommerce scams top the table in terms of volume, but investment scams have the greatest financial impact. Over three-quarters (77%) of participants in Refine Intelligence’s survey saw scams targeting consumers increase the most in the past year.
According to the GASA report, most scams are completed within a day, and many of them within minutes, which means that banks and financial institutions have an extremely small window of time in which to stop them. KPMG found that the majority of banks report a false positive rate of above 61% for scam alerts, which shows how difficult it is to spot scams before they occur.
When it comes to detecting and stopping scams, KPMG found that 91% of banks consider pausing and blocking transactions to be effective, while just 47% had faith in sending warning messages or alerts. 83% of banks monitor the dark web for intelligence on scams. Refine Intelligence reported that 40% of banks say that consumer education and awareness is the biggest obstacle in scam prevention, followed by 34% who cited the increased sophistication of scams.
Who is Liable if a Bank Customer is Scammed?
Very few countries have laws around liability for bank-related scams. In the US, banks are not held liable for a payment that was authorized by the customer, even if the customer fell victim to a scam. That said, many banks have some reimbursement policy in order to strengthen customer trust. Consumers may be eligible for a refund for scammed payments on their credit cards, over a sum of $50.
In the UK, recent legislation requires banks and payment service providers to reimburse APP scam victims of up to £85,000, but banks aren’t liable if they followed a customer’s clear instruction. Similarly, the EU’s Payment Services Directive 2 (PSD2) holds banks liable for unauthorized transactions, but not for those clearly authorized by the customer.
Australia goes further with the 2025 Scams Prevention Bill which puts the responsibility on banks and other entities to detect and disrupt scams. Violations can be fined up to A$50 million.
What Can Banks Do to Protect Customers from Scams?
There are a number of steps that banks can take to protect their customers from scams. These include:
- Use machine learning, behavioral analytics, biometrics, AI-driven scam-specific risk scoring, and data analytics to spot anomalies that indicate scammers and suspicious transactions;
- Pause, delay, or block suspicious transactions so that they gain time to verify their authenticity;
- Automatically engage customers via digital communication channels through technology such as Refine Intelligence, in order to collect context such as who the money is sent to, what is the relationship with the beneficiary, purpose of activity – and use AI to analyze the results and check whether they fit the profile for such an activity
- Conduct regular risk assessments to identify those customers most at risk of scams, and increasing monitoring for vulnerable customers;
- Monitor the dark web for emerging scam trends, and share information with other banks, industry associations, and law enforcement so as to tap into early warnings about new scam behaviors and actors;
- Implement new technology like deepfake detection and dynamic and self-learning rules that adjust permissions in real time.
- Adopt customer-facing dynamic messaging to warn customers before they confirm a transaction or request additional information during risky transactions;
- Verify with the customer that they approve the transaction, ideally through automated outreach that boosts response rates and speeds up replies;
- Carry out continuous, cross-channel education to warn customers about possible scams.
Why Don’t Banks Prevent Scams?
Banks are working very hard to prevent scams, but AI has allowed scammers to scale to unprecedented numbers, overwhelming bank employees. Scam prevention can be challenging, especially when scammers use social engineering to trick customers into bypassing warnings and security barriers.
Because scams usually involve customer-authorized payments, banks won’t normally block them without evidence of wrongdoing or customer request. It’s not easy for them to distinguish between a genuinely urgent payment, and one that’s been manipulated. It doesn’t help that alert resolution is slow and criminals often move money through fast payment networks.
Financial institutions are increasingly adopting AI-powered tools that automate customer outreach. These speed up response time, giving banks more information so they can decide whether to permit or block a transaction, and have questions that are formulated to show whether there’s a scammer coaching the customer about how to answer.
What Can Consumers Do to Protect Themselves from Scams?
Banks alone cannot prevent their customers from falling victim to scams. Consumers also need to act to protect themselves from scam attacks. This involves taking steps like checking the identity of anyone sending emails, SMS messages, or calling about financial issues, and using strong, unique passwords to protect personal details and financial accounts.
Consumers need to learn to question any financial request that involves pressure, urgency, or emotional triggers. Taking the time to run the request past a third party before you send any payment can be all that’s needed to snap out of the stress reaction and realize that you are being scammed. It’s also important to monitor bank and credit statements, check URLs carefully before you send money online, and report suspicious activity immediately.
More information about how to prevent scams.
