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Fraud is something that many Filipinos may already be familiar with, especially with the growing number of scam messages, suspicious links, fake online sellers, and too-good-to-be-true offers circulating today. According to a study, Filipino businesses lost an estimated PHP 4 trillion to fraud in 2025. But what exactly is fraud, and how can understanding it help you protect your money?
“Fraud is any deliberate act of deception to obtain unauthorized benefits, access, or advantages at the expense of others,” said Joanna Marie Velez, Lead for Fraud Quality Assurance at CIMB Bank Philippines and a financial crime professional specializing in Know Your Customer (KYC) standards. “Simply put, fraud happens when someone intentionally deceives another person to gain something that is not theirs or that they are not entitled to.”
While many of us now associate fraud with suspicious emails, text messages, and social media posts, it can happen both online and offline. A fraudulent scheme may begin with a fake website or text message, but it can also involve face-to-face deception, fake documents, or people pretending to represent legitimate businesses or organizations.
Anyone can become a target
According to Velez, people from all walks of life can be affected by fraud, although some may be more vulnerable to falling victim to fraud than others. “Fraudsters often prey on those experiencing financial pressure such as low-income earners or those with significant debt, as well as sectors with considerable amounts of money that can be stolen, such as Overseas Filipino Workers and senior citizens with retirement savings. No one is 100% safe,” she said.
The most common types of financial fraud in the Philippines
Phishing is among the most common types of fraud schemes targeting consumers in the Philippines, according to Statista, a global online data and business intelligence platform. Global technology company Microsoft describes phishing as a type of cyberattack where attackers masquerade as trusted sources to steal sensitive information, whether through email, text messages, or other forms of electronic communication that try to appear legitimate.
“Based on our own monitoring, another relatively new but increasingly common fraudulent activity online involves hotel or resort booking scams, “ said Velez. “This is when fraudsters create social media pages for hotels and resorts and pose as legitimate platforms for booking these establishments. They then ask victims for a downpayment or reservation fee before blocking them and disappearing with their money.”
“Loan scams are also prevalent,” Velez continued “Scammers often ask victims for an upfront payment or collateral, along with confidential personal documents while promising to lend them money with unbelievably good payment terms. Once they get what they want, they disappear without a trace.”
Are financial fraud and scams the same thing?
While the terms are often used interchangeably, they are not exactly the same – particularly when it comes to financial crimes.
“Financial fraud is a broader term that refers to the deliberate act of deceiving someone to gain an unfair or unlawful financial advantage. A scam, on the other hand, involves deceiving a victim into voluntarily sending money or sharing something of value, only for the victim to later realize that they had been dealing with a scammer,” Velez explained.
She further shared that other forms of financial fraud may not involve the victim willingly sending money. For example, in cases of phishing, fraudsters may gain unauthorized access to a victim’s account and use it to make transactions without the victim’s knowledge or consent.
Pinoys are especially vulnerable to financial fraud
Velez said that the financial pressure faced by many Filipinos amid the rising cost of living, especially among breadwinners, low-income earners, and unemployed individuals, make them more susceptible to falling victim to too-good-to-be-true offers online. While this does not mean that financial pressure makes someone responsible for being deceived, fraudsters often deliberately take advantage of people’s needs and hopes.
Financial literacy can make a big difference
“A strong foundation in financial literacy can help people make more informed decisions,” shared Velez. “Financial literacy isn’t just about knowing complicated financial terms or being an expert in investments. It can start with basic skills such as understanding the difference between needs and wants, creating a budget, managing an allowance, and even recognizing when an offer does not make financial sense.“
Financial literacy in the country remains a challenge, although it has steadily improved in recent years. According to the Bangko Sentral ng Pilipinas’ 2025 Consumer Financial Inclusion Survey, financial literacy among Filipinos has improved, with 74% of respondents answering half of the financial literacy questions correctly, up from 69% in 2021.
“People may underestimate the value of awareness about fraud, but it forms part of a solid foundation for financial literacy among Filipinos. Protecting ourselves from fraud is a shared responsibility between financial institutions and customers, so we all have a role to play in protecting ourselves and our hard-earned money. Let’s all stay vigilant and informed,” said Velez.
