More than one in three (35%) adults in Ireland have experienced fraud but over a third of fraud victims never report it, according to new research from the Central Bank.
The study found that nearly two thirds of victims lost money as a result of the fraud, with most victims losing “relatively modest amounts” (39% losing less than €249).
The Central Bank research identified investment fraud as a “particular concern”, with the regulator saying that although it impacted just 7% of respondents, investment-fraud victims typically lose more substantial amounts.
According to the findings, online-purchase scams were the most common type of fraud (affecting 48% of victims), followed by debit and credit card fraud (34%).
Other prevalent scams included delivery service impersonation (15%) and phishing/email scams (13%).
The report said “risky online behaviours” were the “single strongest…
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Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.