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A new Brazilian bill would tighten penalties for social media scams, embezzlement and extortion involving PIX or WhatsApp.
Last week, deputy Paulo Martins introduced a bill to the Brazilian Chamber of Deputies, proposing to increase prison and financial penalties for social media fraud and crimes of embezzlement and extortion involving PIX, the country’s popular instant payment system, and WhatsApp.
As proposed by the bill, criminals that take “undue economic advantage” over their victims using instant electronic payments on PIX or WhatsApp may face a financial penalty and imprisonment of eight to 12 years.
Brazil is one of the few countries where WhatsApp users can send in-chat payments to each other. Payments are processed across either Visa Direct and Mastercard Send services, which, depending on the financial institution, can occur in real-time.
Fraudsters using social networks, instant messaging services, email or other similar methods to trick people into sending them money via an instant payment, such as PIX, may be subject to imprisonment for six to ten years.
The proposal to tighten the rules follows a surge in PIX and WhatsApp-related scams in the country.
In August 2020, the government of Mato Grosso reported that WhatsApp impersonation was the most frequently used method to commit crimes of embezzlement and the police in the state of Paraná warned that a variety of new types of scams are used on WhatsApp.
According to a survey by the digital security company PSafe, in October 2020, 453,000 people had their WhatsApp accounts cloned or spoofed in Brazil, amounting to an average of 15,000 victims per day.
PIX has similarly become a medium of crime.
Right after the registration of PIX keys started in September 2020, cybersecurity company Kaspersky warned that fraudsters had already set up a phishing campaign whereby onboarding users are tricked into sharing their personal data when they believe they are subscribing to PIX, but instead are using fake websites.
Earlier this January, the same firm cautioned that two new types of scams are making use of QR code payments on PIX. Although these types of scams are not unique to PIX, the transactions take place within seconds, which makes it more efficient for fraudsters to use this system.
Since the service was launched in late 2020, almost 600,000 PIX keys have been stolen in three different incidents, exposing personal data such as mobile numbers, email addresses or tax registration IDs used to send and receive payments.
In addition to scams taking place in cyberspace, criminals also tend to use extortion and physical force to break into people’s homes and force them to transfer funds to their bank accounts.
“Considering all the above mentioned factual context, it is essential to increase the penalty for crimes of extortion and embezzlement committed through PIX or WhatsApp in order to curb such criminal activities,” Martins said in his proposal.
In response to these events, the Brazilian Central Bank (BCB) has also introduced measures to increase the safety and security of PIX.
For instance, last August, the BCB limited the value of transactions carried out at night between individuals to BRL1,000.
The central bank has also established mechanisms to facilitate the blocking of funds and their possible return to the sender in case of fraud, such as precautionary blocking and a special return mechanism.
