Decrease in fraud occurrences in Russia, yet fewer instances of reimbursement to affected individuals
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In a concerning development, the proportion of funds returned to victims of bank fraud in Q2 2023 has decreased, despite a reduction in the number and volume of these operations. This trend is attributed to the increasing technical complexity of fraud schemes, evolving criminal tactics, and regulatory complications related to Russia.
According to Timur Aitov, the Chairman of the Financial Security Commission of the Chamber of Commerce and Industry’s Council, fraudsters stole 6.33 billion rubles from Russians in the second quarter. This figure, however, does not represent a decrease compared to the previous quarter or the same period last year, as the volume of thefts decreased by 8% compared to the first quarter but increased by almost 33% compared to the same period in 2022.
The decrease in the proportion of funds returned to victims is not related to the new amendments to the legislation, as banks had already started blocking suspicious transfers before these amendments came into force. Anna Vyatkina, an analyst from Positive Technologies, highlighted the role of self-imposed credit bans in this context.
Fraudsters are increasingly utilising advanced fraud bots and adaptive technologies, bypassing typical security measures such as one-time password protections, enabling more elusive attacks that hinder fund recovery efforts. The ongoing increase in financial crime technological sophistication demands constant adaptation by anti-fraud systems and controls; failure to keep pace can reduce the effectiveness of victim fund recovery.
The broader environment of sanctions and enforcement related to Russia complicates cross-border recovery of illicit funds, as sanctions restrict transactions and cooperation channels, possibly limiting the ability to repatriate stolen money. The return of funds via the System of Quick Payments (SQP) is a rare occurrence and is only possible with the consent of the recipient and their bank.
The strengthening of control over operations in financial institutions' branches was noted by RTM Group’s Manager, Yevgeny Tsarev. Denis Kalembeg, the General Director of SafeTech, explained that the low return rate is a result of social engineering, where people transfer money to what they believe is a safe account.
In light of these challenges, financial institutions must improve fraud detection, behaviour analysis, and earlier threat intervention to better protect funds. The proportion of funds returned to victims for all operations fell to 5.2%, and for transactions using the System of Quick Payments (SQP), it dropped to 2.7%. Despite the lower number and volume of fraudulent operations, the complexity or target selection by criminals could have shifted toward schemes that are harder to trace and recover from.
The report in Kommersant did not provide any new information about the number of funds stolen from Russians in the second quarter, the proportion of funds returned to victims for all operations, or any increase or decrease in the number of illegal operations or the volume of thefts compared to the previous quarters. The number of illegal operations exceeded 273,000, which is one of the lowest figures in the past two and a half years.
- The increasing complexity of fraud schemes in the business sector, coupled with the evolving criminal tactics and regulatory complications related to Russia, has led to a decrease in the proportion of funds returned to victims in general-news cases like bank fraud.
- In the broader context of financial crime, the use of advanced fraud bots and adaptive technologies in crime-and-justice operations is making it increasingly difficult for anti-fraud systems to recover stolen funds, as these technologies bypass conventional security measures, enabling more elusive attacks.
