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Online investment scams grew in Ireland last year, report claims

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A report from FraudSmart claims APP fraud victims were conned out of €8.6m in the first half of 2023 and that older people in particular are being tricked by investment scams.

An Irish fraud awareness initiative warns that certain types of banking transfer scams rose significantly in the first half of 2023, according to a new report.

The figures released by FraudSmart – an initiative led by Banking and Payments Federation Ireland (BPFI) – show authorised push payment (APP) fraud rose by more than 25pc in the first half of 2023. These APP scams happen when someone is tricked into sending money to an account controlled by a criminal.

The report said this increase involved online and mobile banking transfers and that victims were conned out of €8.6m in the same period. FraudSmart also warned that sophisticated variants of these scams were detected.

FraudSmart also said the most prevalent types of APP fraud appear to be investment scams. BPFI head of financial crime Niamh Davenport said fraudsters behind these scams hide behind websites such as product or investment comparison websites that “can appear to be legitimate”.

“Consumers looking to invest submit their details for more information and the fraudsters then call or follow up with an email, often including what looks like a high-end brochure,” Davenport said.

“Once the victim has authorised the payment and the money has reached the criminal’s account, the criminal will quickly transfer the money onwards to numerous other accounts, often abroad, where it is then cashed out.”

Davenport said these investment scams are particularly targeted at people who are older than 55, based on the latest figures. The investment amounts can start from around €5,000 and were between €50,000 and €600,000 in some cases.

“While the amounts may be high, victims are not necessarily wealthy customers, but often people who have worked hard to build up a pension and are looking for a last opportunity to top up their finances ahead of retirement,” Davenport said.

FraudSmart urged consumers and businesses to be cautious of adverts that appear online and on social media platforms, even if they are paid or sponsored ads that use familiar brand or business names. Individuals should also conduct research on any firm for qualifications, credentials, reputation and history before making investments.

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