Third-party criminal fraudsters sometimes use tactics like credential stuffing and card cloning to steal card numbers and takeover accounts that don’t belong to them. The common denominator in these types of fraudulent attacks is that they happen without the knowledge or consent of the victim.
Another way fraudsters can gain unauthorized access, though, is to enlist the help of victims themselves.
No, I’m not talking about second-party fraud, in which victims serve as willful accomplices to bad actors. Instead, what I mean is social engineering, a far more insidious form of psychological manipulation where victims are deceived into inadvertently divulging personally identifying information.
In this guide, I’m going to take you for a deeper look at social engineering fraud. We’ll talk about how it works, who it impacts, and how you can identify and prevent swindlers from stealing your sensitive details.
Social engineering refers to a broad set of tactics that exploit human behavior and emotions. Social engineering fraudsters get victims to voluntarily give up their personally identifying information by preying on fear, curiosity, pressure, and anger.
Doing so allows bad actors to gain unauthorized access to user accounts, banking information, business passwords, and corporate documents without ever having to hack into a protected system using brute force.
Read MoreWhile phishing emails and websites are the most common form of social engineering fraud, the universe of psychological manipulation is far broader. Anything from catfishing and water holing to tailgating or even diversion can be considered social engineering, leaving virtually no business or individual immune.
Worse, social engineering fraud tactics are always evolving. Thanks to the proliferation of generative AI technologies, some tactics, like voice cloning-enabled vishing scams, are rapidly becoming more popular.
Read MoreUpwards of 90% of all cyberattacks involve some element of social engineering. Unfortunately, this means that the lion’s share of the more than $16 billion lost to cybercrime in 2024 can be at least partly attributed to social engineering.
To make matters worse, social engineering attacks can be disastrous, even on an individual level. A single business email compromise scam that employs social engineering tactics, for instance, can deal millions of dollars worth of fraud losses. But, even “run-of-the mill” tech support scams — if you can call them that — can cause elderly victims to lose a substantial portion of their life savings.
Read MoreWhen it comes to fraud, bad actors don’t discriminate. Social engineers target businesses of all sizes. It doesn’t matter if it’s a $100 million social engineering attack targeting tech giants like Facebook and Google, or the type of rudimentary AI voice cloning scam typically targeted at small and mid-sized businesses. In the end, no organization should ignore social engineering fraud.
Read MoreSocial engineering fraud targets vulnerabilities in human psychology. The antidote to that is to exercise self-awareness, vigilance, and critical thinking; all defensive factors that fraudsters hope are switched off.
Obviously, being hyper-vigilant at every turn is exhausting in practice, so the more sustainable solution is to rely on warning signs and heuristics that can help you detect signs of social engineering. Here, telltale red flags include “too good to be true” offers, emotionally charged language, or suspicious downloadables.
Read MoreSocial engineering targets humans, rather than technology. So, an approach that relies purely on technical defenses won’t work.
To adequately protect themselves, businesses need to develop robust security policies that incorporate baseline tech-enabled defenses like ID checks with procedure-based verification protocols like vendor checks. Layering on security and fraud awareness training can help merchants keep their staff informed and updated about the latest fraud tactics and anti-fraud initiatives.
Read More
One example of social engineering is BEC or business email compromise. This is a scam conducted through email. With a BEC attack, an email will appear to come from a legitimate source within the business. However, the sender is an imposter attempting to trick members of the organization into divulging sensitive information.
It can be. However, some social engineers target physical facilities like offices, coffee shops, and anywhere people might be gathered, and where funds or information can be openly exchanged.
Social engineering is popular because it is so effective. Humans are often the weakest link in the fraud chain, and targeting them is often much simpler than developing and testing costly software to work around fraud detection tools. Tricking a human being into making a mistake doesn’t cost much more than the fraudster’s time and is a lot easier than attempting to brute force their way through a company’s security system. For the social engineer, the path of least resistance wins.
Phishing is the most common of all social engineering attacks. In fact, the tactic works so well that fraudsters have updated the phishing to adapt to newer technologies, with practices like “vishing” and “spear-phishing.”
Self-awareness, critical thinking, and time are the defenses against social engineering. Any message that encourages you to react with an emotion like panic or fear should be highly suspect. Additionally, anything that seems too good to be true, or just slightly off in some way, should give you pause.
Fraud involves the use of hacking or technical methods to steal credentials without victims’ knowledge or consent. This includes a situation in which the user gives up their information, but under false pretenses. Social engineering, which is a specific tactic that can be used to commit fraud, involves the use of psychological influence and deception to trick victims into voluntarily giving up their credentials.
Social engineering can be a form of credit card fraud. Specifically, social engineering can be used to carry out credit card fraud when tricksters cause victim cardholders to divulge their card numbers, card verification values (CVVs), and other sensitive information.
Phishing is a specific subset of social engineering in which scammers use deceptive emails, websites, and text messages to trick victims into handing over their personally identifying information. Put another way, all forms of phishing involve social engineering, but not all forms of social engineering involve phishing.
