Social Engineering and Other Types of Fraud in Financial Transactions

Fintech and payment systems are not only dynamic and developed industry that ensures daily transactions worldwide but also a target for many devoted fraudsters. The complexity of security systems, two-factor verification, and legal methods to enhance the resilience of the industry have undoubtedly yielded excellent results, as seen in many payment solutions.

However, the human factor, which cannot be directly influenced, poses an increasing danger year by year. The number of social engineering fraud cases is constantly rising, and Monoup team has prepared a small guide for our readers on how it works and how to defend your funds. Today, we will discuss the most popular fraud schemes for stealing funds and how to counter them, both for businesses and users.

What is Social Engineering?

Social engineering is a manipulation technique that cybercriminals use to deceive people into sharing confidential information or performing actions beneficial to the attacker. It exploits human psychology, often leveraging emotions such as fear, urgency, curiosity, or just desire to help.

In the digital age, straightforward fraud attack does not work as well as it used to, so many schemes have evolved into more cunning ones. Manipulating human emotions remains the most dangerous, including for one's wallet. Residents of certain countries are more susceptible to this risk than others due to income levels and quality of life. It is known that in USA and the UK, levels of such fraud (especially phishing) remain very high. In 2024, Americans lost over $12 billion due to various types of online fraud, which is 25% more than in 2023. Britons lost over £1 billion in 2024 due to cyber fraud and unauthorized charges.

Overall, the level of online fraud increased by 10% worldwide in 2024, and regulators are sounding the alarm. The emergence of AI services that can produce realistic videos, photos, and copy real people voices has also influenced the situation, making it even more difficult to counter fraudsters. Paradoxically, some AI services will fight others, trying to track fraud and help reduce it. Additionally, manual fraud methods still work, which is increasingly concerning.

How Businesses and People Are Deceived

The high-profile cases with crypto exchanges Coinbase and Kraken in May 2025 literally forced fintech to pay more attention to their security, and every individual user was no less concerned. After all, in addition to investing in quality systems, choosing reliable financial partners, and constantly following basic security rules, these days, one must also be constantly vigilant. To avoid falling for the tricks of fraudsters who act more cunningly than hacking or data theft; they gain trust and manipulate account owners and even employees of banks or financial companies.

How does this happen? And most importantly, how to protect oneself?

The most popular methods of deceiving businesses may include:

• Impersonation for Threats or Unauthorized Orders: For example, many fraudsters pretend to be employees of government agencies, large companies, or associations to scare their victims and extract important financial information. By creating a stressful situation, such individuals can succeed if they find the right employee. Sudden calls or letters from the “tax authority” or even Meta company are common schemes that employees of many companies fall for, not realizing they are being deceived while trying to help their employer by cooperation with the authorities. 
  
  To protect your business from such situations, conduct briefings and train employees so that they do not panic and know how to act in case of a call from an unexpected authority. Fraudsters rely on speed and pressure, so it is important to stop and think: could this really happen? How can I verify that the call is coming from a legitimate source? It is worth postponing the conversation, discussing the incident with lawyers or company management, and moving the dialogue to an official level.
   
• Targeted Attacks Using Company Leadership Identities: This method of deception was also very popular in regular messengers in iGaming industry. Fraudsters pretend to be CEO, COO, or another C-level manager and text to finance, accountants, or other individuals with access to bank accounts, asking them to make an urgent payment. Of course, this payment most often goes to the fraudsters' accounts, and later it turns out that it was not the CEO at all, and his account was well forged. 
  
  To avoid such losses and protect business assets, communication should only be conducted in verified work accounts and systems, excluding personal means of communication. Additionally, it is important to create a well-functioning finance department where payments will be checked before being executed, and more than one person will be involved in the process. This will help reduce the number of errors, incorrect payments, and the entire risk of fraud.
   
• Phishing/Email Attacks: This type is often also aimed at some target employees. After research, fraudsters send a phishing email allegedly from a trusted partner or colleague, inserting a link that can steal important data or otherwise compromise the recipient. 
  
  To combat this method of deception, you need to implement security measures, block the emails from unknown or suspicious addresses, and create a procedure for verifying the sender before taking any action. Of course, suspicious links should not be opened at all, and any data should not be inserted in untrusted online services.

All these methods of fraud target companies and businesses, but ordinary people also become victims, as their weaknesses are exploited by fraudsters. Their main weapon is surprise and stress factors, which allow them to pressure a person and make them perform an action beneficial to the fraudsters immediately. Current cybersecurity systems can provide a high level of resilience, and not everyone can hack them. Therefore, fraudsters have evolved into social engineering, and now they do not need to become developers or technical specialists to penetrate complex systems.

At the same time, not only successful businesses have become targets of such fraud, but also ordinary people. Standard phishing through advertising mailings, delivery mails for non-existent parcels, or lottery winnings still benefit for its creators. This activity has developed into entire networks that create fake businesses offering people to invest or accounts of non-existent women and men on social networks, drawing the person on other side of the screen into a “romantic scam.”

Unfortunately, it is unlikely that social engineering can be completely erased, as both defense and attack systems evolve. The only 100% effective means is to raise public awareness of such risks and educate internet users to verify the sources of any communications. Financial literacy also plays a significant role in this matter, as it is important to know major principles of card payment systems, wallets, or other payment methods to also understand their vulnerabilities. If someone asks for the CVV code over the phone, a financially literate person will know that it should never be disclosed.

Professional expertise and caution in fintech and other online industries are a must-have today. Stay informed and vigilant! And don’t forget that MonoTalks media always shares the nuances of payment methods for you to be informed and educated. Follow us for more.