SUMMARY
The rise in digital connectivity has greatly increased sophisticated online scams, evolving from simple deceptions to complex schemes that pose serious risks. Criminal activities have shifted from traditional robberies to virtual frauds and digital scams. Cellphone thefts are particularly problematic, as stolen devices are often used to access personal information and commit further financial crimes. Organized crime groups have adapted by using digital tools and cryptocurrencies, making these crimes harder to combat. As scams grow more advanced, individuals must remain vigilant and adhere to protective practices to safeguard against these evolving threats.
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A Rising Threat
The increase in digital connectivity has brought numerous benefits but has also facilitated the rise of criminal activities, particularly online scams. These scams have evolved from simple deceptions into highly sophisticated schemes, posing significant risks to individuals and businesses globally. This evolution is confirmed by research such as the 2024 Brazilian Public Security Yearbook and surveys conducted by Datafolha in partnership with the Brazilian Public Security Forum.
Data from the 2024 Brazilian Public Security Yearbook, which analyzed statistics from 2023, reinforces the already announced shift in crime patterns that began during the COVID-19 pandemic. This report strengthens the notion of a transformation from a traditional scenario of crimes, where robberies stood among the leading threats, to one where crimes such as traditional and virtual frauds, and theft are predominant in impact and incidents reported.
The results from 2023 solidify this trend and show a broader national issue. The data shows a 13.6% increase in virtual fraud between 2022 and 2023, contributing to financial losses that may exceed billions of reais. The accompanying graph highlights this shift, showing rises in fraud and cellphone thefts, while traditional robberies have declined. This shift emphasizes the urgent need for heightened awareness about frauds, especially those perpetrated via online environments.
According to estimates from Datafolha and the Brazilian Public Security Forum, more than 4,600 people in Brazil are targeted by financial scams every hour through messaging apps or phone calls, often by criminals posing as bank employees. At the same time, approximately 2,500 people fall victim to online purchases where products are never delivered. The survey, which included 2,508 respondents from across the country, indicates a higher incidence of these crimes than official reports suggest. Notably, only 30% of victims of Pix, the instant payment platform created and managed by the monetary authority of Brazil, the Central Bank of Brazil, or fake bill scams reported these incidents to the police, highlighting a significant rate of underreporting.
These scams have led to an estimated financial loss of R$ 25.5 billion over the past year, primarily from Pix and fake bill frauds. The Scamscope Fraud Report by ACI Worldwide and GlobalData identifies the main types of scams in Brazil for 2023: requests for advance payments (27%), product purchases (20%), investments in companies (17%), invoice payments (10%), and transfers related to fake relationships (7%). Additionally, 7% of scams involve impersonation of authorities or reputable organizations. More than 60% of these scams result in small to medium losses, a tactic used by fraudsters to conceal their activities amid the high volume and rapid pace of transactions.
This data underscores the growing sophistication and prevalence of online scams, illustrating the need for ongoing vigilance and proactive measures to safeguard against these evolving threats.
Common Types of Online Scams
As digital technology advances, online scams have evolved and become more sophisticated. On top of that, evolution leads to constant innovation and new scams constantly appearing, which makes it even more difficult to fight them. To give some other to this chaos, experts have found ways to create some order and categorized them based on the methods used by scammers and their objectives, which consequently helps avoid them and their impact. Here are some of the main types of online scams:
- AI Scams
In 2024, the rise of artificial intelligence led to an increase in sophisticated scams, including deepfake technology. Deepfakes create realistic but fake videos, often used to trick individuals into believing someone is endorsing an investment or asking for money. A case in Brasília involved a 34-year-old lawyer and her mother, where scammers used a deepfake video to impersonate the daughter in a video call requesting a loan. The scam was uncovered when the mother noticed suspicious details and asked a personal question the scammers couldn’t answer.
- WhatsApp Scams
WhatsApp, a popular communication app in Brazil, has become a prime target for scams. Tactics include sending fake messages that appear to be from legitimate companies to steal personal information or spread malicious links. Another common scam involves account cloning, where criminals take control of a person’s WhatsApp account and impersonate them to deceive their contacts, often soliciting money or confidential information. This is now one of the most common scams and hundreds of thousands of cases happen annually.
- PIX Scams
PIX, a widely used payment method in Brazil, has also become a focus for financial fraud. Scammers exploit PIX’s convenience through several methods:
- Pix Copy and Paste: Using fake QR codes to divert payments.
- Pix Bug: Spreading false claims of a glitch that doubles transfers, with funds going to the scammer.
- Pix Diversion: Installing apps on victims’ phones to monitor and divert transactions.
- Refund Scam: Scammers transfer money to a victim’s account, claim it was a mistake, and request a refund, while activating a refund mechanism to reverse the original transfer, causing losses for the victim.
These scams illustrate the growing complexity and diversity of online fraud. As criminals adapt and innovate, it is crucial for individuals and businesses to stay informed and vigilant to protect themselves against these evolving threats.
Cellphone Robbery and Digital Fraud
The theft and robbery of mobile phones are closely tied to digital fraud, as stolen devices often grant criminals access to personal information, leading to further financial crimes. Once in possession of a stolen phone, criminals can exploit apps to carry out financial fraud, access bank accounts, and control social media profiles, making the initial theft just the beginning of broader criminal activities.
A recent Datafolha survey, commissioned by the Brazilian Forum on Public Security, estimates that Brazilians lost around R$ 71.4 billion over the past year due to mobile phone thefts and robberies. These crimes are highlighted as some of the most significant property-related offenses, with about 9.2% of surveyed individuals reporting their phones being stolen or robbed during this period. The average financial loss per incident was R$ 1,549.
Beyond immediate financial losses, these thefts often lead to additional crimes, such as digital scams and extortion. The survey revealed that 13.7% of respondents had paid for products online or via social media that were never delivered, underscoring the extended impact of phone theft. Additionally, 10.8% of participants reported falling victim to financial scams through messages or calls over the past year.
The study also points out a significant issue of underreporting, with only 55% of mobile thefts and 30% of digital frauds being reported to authorities. This underreporting hamper effective responses and necessary policy adjustments.
The total estimated financial impact, including subsequent scams and frauds, reaches R$ 186 billion. This substantial figure reflects both the direct losses from phone thefts and the broader financial consequences of related digital crimes. The findings highlight an urgent need for improved security measures and more effective investigative practices to combat this growing threat.
Organized Crime and Cyber Fraud
Organized crime in Brazil, particularly groups like the First Capital Command (PCC), has rapidly adapted to technological advancements, incorporating cryptocurrencies and digital tools into their operations. This trend was highlighted by a multi-sector operation in August 2024, where federal and state authorities dismantled communication towers and illegal cellphone shops in São Paulo. These devices were used by the PCC to intercept Military Police communications and coordinate criminal activities, including drug trafficking and fraud.
The COVID-19 pandemic accelerated the digitalization of society, providing new opportunities for cybercrime. While violent crimes like homicides and robberies have decreased, online fraud has surged. This rise reflects the shift of criminal activities to the digital realm, where perpetrators face lower risks and detection is more challenging.
One key tool in these crimes is the instant payment system Pix, launched in 2021. Criminal gangs have specialized in various types of fraud using this technology, targeting victims across Brazil. The widespread use of smartphones within Brazilian prisons has enabled inmates to continue committing fraud even while incarcerated. Smaller criminal groups often exploit the name and reputation of larger organizations like the PCC to extort money from victims through Pix-related scams.
Efforts to install signal jammers in prisons to curb these activities have faced resistance due to concerns about hindering law enforcement investigations. This situation underscores the growing challenge for Brazilian authorities in regulating and controlling new forms of crime driven by technological advancements. As criminals increasingly move from violent crimes to virtual ones, which carry lower risks and more lenient penalties, there is an urgent need to adapt public security strategies. Additionally, as virtual scams become more sophisticated, individual protection measures are increasingly vital to safeguard against these evolving threats.
How to Protect Yourself
Brazilian banks, led by Febraban, are intensifying efforts to combat fraud by educating the public. Key steps to protect against scams include:
- Avoid responding to suspicious messages. Contact your bank directly to verify any claims.
- Never share sensitive information. Banks will not ask for passwords, tokens, or financial transfers.
- Be cautious of offers that seem too good to be true. Scammers often create urgency to pressure victims into quick actions.
- Confirm payment receipt before delivering goods.
- Enable two-step verification on apps like WhatsApp to add an extra layer of security.
- Protect personal data on social media by being mindful of what you share.
- Verify identities before making any transfers.
- Be skeptical of app installation requests—banks will never ask you to install an app through a message or phone call.
If you fall victim to a scam, report it immediately to your bank and the police, and keep detailed records of all communications and transactions. Swift action can help mitigate damage and aid in recovering lost funds.
