Financial fraud is becoming a global epidemic that’s expected to intensify in 2025, according to a stark warning from the Bank of Israel. With artificial intelligence and deepfake technologies accelerating the scope and sophistication of scams, the central bank is calling on the government to appoint a national coordinating body to oversee efforts to combat financial fraud.
The report outlines a surge in scams targeting Israelis, including fake websites impersonating brands like Zara and Shufersal, phishing emails from entities like the postal service, Israel Electric Corporation, and Netflix, and phone calls from fraudsters posing as Bezeq representatives.
Other tactics include unauthorized SIM swaps to intercept two-factor authentication messages, fake online stores offering counterfeit goods at suspiciously low prices, phony investment platforms, and scams targeting elderly Russian-speaking citizens.
In 2024, the most common scams in the financial sector targeted Russian speakers and former Soviet Union immigrants. Fraudsters lured victims into fake crypto investment platforms with promises of quick profits, using techniques such as phishing (via text messages and fake websites) and vishing (phone calls from impersonators pretending to be bank or government representatives). There was also a rise in SIM hijacking and remote access software being used to gain unauthorized control over victims’ phones.
The report distinguishes between two types of fraud:
Authorized fraud (scams): where the victim is manipulated into voluntarily transferring money to a scammer, believing the transaction to be legitimate. These cases often make compensation difficult.
Unauthorized fraud: where criminals steal account access or credit card information to carry out transactions without the victim's knowledge.
To address this growing threat, the Bank of Israel urges the establishment of a centralized authority that would define a national strategy, coordinate between financial institutions and law enforcement, and set clear goals. Other countries offer working models: the UK has tasked its Home Office with this role; Singapore and Australia operate dedicated Anti-Scam Centers that use automation to alert customers in real time. In Hong Kong and Japan, banks share fraud data with regulators and each other.
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The report also highlights the importance of public awareness campaigns, such as those implemented in Germany, Japan, Canada, and Italy, alongside stricter enforcement and tougher penalties for perpetrators. Britain’s strategic plan includes legal pursuit of fraudsters and bolstering law enforcement capabilities.
According to the Bank of Israel, the banking regulator has already intervened in cases where banks failed to adequately support defrauded customers, securing NIS 3.4 million in compensation over the past two years.
Banks and credit card companies are required to:
- Develop anti-fraud strategies and monitoring systems.
- Track emerging fraud trends and update internal systems accordingly.
- Alert customers of suspicious activity.
- Educate customers on identifying scams.
- Act immediately when fraudulent activity is detected.
- Improve the security of accounts and payment methods.
- Maintain transparent records of all fraud cases.
- Establish clear compensation policies for fraud victims.
- To avoid falling victim, the Bank of Israel advises consumers to:
- Guard their privacy and never share verification codes or sensitive data.
- Avoid clicking on links in unsolicited messages.
- Never hand over credit cards to messengers.
- Be cautious of non-Hebrew-speaking callers claiming to represent banks.
- Use strong passwords or biometric authentication.
- Only access bank accounts through official apps or websites.
- Never install remote access software unless absolutely necessary.
- Discuss suspicious messages with trusted family or bank representatives.
- If a mistake is made, immediately notify the bank, credit card company, and police.
Consumers are protected under Israeli law from losses incurred after reporting a scam, and may be eligible for compensation based on the circumstances prior to reporting.