Bank of Israel warns of rising financial fraud, urges creation of national authority

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.

There is a surge in scams targeting Israelis, including fake websites impersonating brands like Zara and Shufersal, phishing emails from services 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.

Fraudsters lure 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 people 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.

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.

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.

Advice from the Bank of Israel to consumers:

• Guard your 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.

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