Filipinos worry about falling for financial scams — study

Filipinos are most concerned about falling for financial scams amid the surge in real-time payments (RTP), according to a survey by global analytics software firm FICO released on Tuesday.

Around 35% of Filipino respondents in FICO’s survey said their top worry is the risk of being tricked into sending money to criminals, which leads to instant, irrevocable losses that are rarely eligible for reimbursement.

FICO surveyed 1,001 adults in November 2023.

“The Philippines’ adoption of real-time payments continues to accelerate, with 98% of adults having sent a real-time payment and 65% expecting to increase their use over the next year,” Chee Keong Leo, FICO lead for fraud, security, and financial crime in Asia-Pacific, said in a statement.

Mr. Leo added that as the adoption of RTP surges, driven by payment platforms like Maya, GCash, and GrabPay, there has been a “transformative shift in financial behavior” among Filipinos.

“Yet, amidst this rapid digitization comes an urgent need for heightened vigilance against fraudsters lurking in the digital realm,” he added.

FICO cited a 2023 study on trends in authorized push payment (APP) fraud and real-time payments in the Philippines, which reported that 82% of Filipinos have received unsolicited text messages, e-mails, phone calls, or other communication that they believed to be part of a scam, while 61% surveyed said that their friends or relatives had been affected. However, only 26% reported actual or suspected losses to their banks.

In a separate report, FICO said that 25% of respondents experienced sending real-time payments for investments, goods, or services they never received.

About 74% of those who fell for scams using RTP lost up to PHP 25,000, while 1% saw losses of PHP 300,000.

“Banks now face a crucial moment to invest in cutting-edge solutions to tackle the surge in scams, particularly with the swift uptake of real-time payments in the Asia-Pacific financial landscape,” Mr. Leo said.

“The irrevocable nature of these transactions has led to new criminal threats. By integrating scam-specific analysis and scoring into transactions, along with robust decision-making capabilities across the customer journey, banks can preemptively detect and thwart scam payments, sparing customers from financial harm. Furthermore, while some consumers may ignore warnings, the majority will heed alerts and refrain from making real-time payments if alerted to potential scams,” he added.

Meanwhile, concerns about identity theft also persist among Filipino respondents, with over 23% citing it as their top financial crime concern, FICO added. This was followed by having a bank account taken over by a fraudster (16%), their credit or debit card being stolen and used (13%), their cash being stolen (8%), and fake online retailers and fake advertisement tricking them into buying goods that never arrive (6%).

FICO, however, noted the difference between perception and reality among Filipinos in terms of instances of identity fraud, with about 33% believing they are unlikely to have been a victim, while 19% see it possible and 27% confident their identity is untouched.

“Moreover, only 5% of Filipino respondents reported their stolen identity being used to open a financial account, a slight increase from 4.5% in 2022,” it said.

“While some may downplay the risk of identity theft in the Philippines, millions remain vulnerable,” Mr. Leo said. “This underscores the need for heightened awareness and proactive measures. By breaking down silos and integrating identity verification and fraud detection processes, we can streamline applications and bolster trust in legitimate customers.”

Meanwhile, Filipino respondents said their most important considerations when opening financial accounts are good fraud protection and ease of use, FICO said.

“These were both considered significantly more important than good customer service, strong anti-money laundering policies, sound green/environmental policies, ethical use of customer data, behaving fairly, and good value for money,” it added. — A.R.A. Inosante