Cybercrime: the invisible theft in the cashless economy

*We often see news about cybercrimes. Large ones, like the Equifax breach, when hackers stole data of roughly 145.5 million US customers, the Wannacry attack, or theft of $400 million from the cryptocurrency exchange Coincheck, seem to be the most disturbing. * All these crimes vary in nature. The Equifax breach was an identity theft, Wannacry was ransomware attack, and hackers stole cryptocurrency during the Coincheck incident. Nevertheless, there is one common thing: all of them are large-scale cybercrimes. And while we denounce audacity of cybercriminals, we do not realize that our cards and bank accounts are subject to the same threats.

**Invisible crimes ** Small crimes often go unnoticed. Of course, newspapers won’t write about money stolen from your neighbors’ bank account (unless they are well-known billionaires), and the whole world will not discuss loss of your bank card. Besides, people and even companies often avoid contacting the police when their digital identity has been compromised. The Competition Bureau Canada explains: “Consumers often don’t report fraud because they are embarrassed that it happened to them, or maybe they only lost a small amount of money and don’t want to go through the hassle of reporting it. Businesses don’t want to appear vulnerable or damage their corporate image and see it as the price of doing business today. Even worse, there is a perception that this is not a “real” crime, and that law enforcement agencies have more important matters to tackle”. Meanwhile, the number of those who reported a fraud is growing. In the UK the share of digital payments in the economy is growing remarkably fast. The UK Finance reports that in 2006, 62% of all payments in the UK were made using cash; in 2016 the proportion had fallen to 40%. By 2026, it is predicted cash use will only represent 21% of transactions. At the same time, the fraud prevention service Cifas says that identity theft hit epidemic levels in the UK. There were nearly 500 incidents of this type every day in 2017.

**Digital blindness ** The problem with thefts in the cashless society is that it is hard to notice a small online crime. The reason is not only sophistication and variety of online scams (Heimdal Security defines 17 types of them), but also the attitude towards such crimes as a whole. Often, end users do not perceive their digital money as something that really belongs to them. Researchers Priya Raghubir and Joydeep Srivastava showed that paying with a credit card is less painful than paying with cash (and so shoppers spend more money). It is easier to say goodbye to something intangible. Same with stealing money from our bank accounts and credit cards. We quickly notice disappearance of several banknotes from our wallets, but a small write-off (especially if scammers managed to turn off mobile alerts) often goes unnoticed. Besides, the Cifas service notes that many victims do not even realize that their data was taken, or their money stolen before they receive an alert by email or when they apply for a loan. Often, we do not even realize that our rights have been violated until it becomes too late. Apart from the “blindness” of users, there are ignorance of authorities. Cashless society proponents assert that a full transition to a digital economy will significantly reduce the number of crimes. However, every year it is more and more obvious that law enforcement systems simply cannot cope with the large number of online scams. Latest PYMNTS Global Fraud Index shows that global fraud incidents went 5.5 percent up from Q2 2016 to Q2 2017. The Index also states that frauds throughout the world can cost merchants in eight different industries $57.8 billion each year. Ken Gamble, executive chairman of Internet Fraud Watchdog Ltd., explains such an incompetence: “All of a sudden there’s an explosion of technology and internet but police forces are still the same as they were 10 years ago. The police can’t deal with it so nobody is dealing with it so the problem is getting worse.”

**Nobody is ready to fight online scams ** Money becomes invisible and intangible in a digital society. Developed countries have excelled in coping with offline thieves, and their developing neighbors are rapidly adopting the practices. However, no one has yet been prepared for an effective fight against online criminals. Advocates for a cashless society say that the path to the digital economy has already been open. Yet, it is not a wide and beaten road, but a narrow path with many roadblocks. Perhaps we should discover the way first, and only then set off. After all, there is some wisdom in the old saying “The more hassle, the less speed.”

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