Identity Fraud Hits All-Time High in 2017
Survey reports that the number of fraud victims topped 16 million consumers last year, and much of that crime has moved online.
Two new fraud studies have confirmed that while EMV chip cards are preventing breaches at point-of-sale (POS) terminals at retail stores, fraudsters continue to turn their attention to online crime. In fact, card-not-present fraud has become 81% more likely to occur than POS fraud.
One report, the 2018 Identity Fraud Study released today by Javelin Strategy & Research, found that in 2017, the total number of fraud victims increased 8% to 16.7 million. The Javelin report also found that 6.64% of consumers became victims of identity fraud last year, an increase of almost 1 million victims from the previous year. The increase was driven by growth in existing non-card fraud and account takeover (ATO) schemes.
In one of the more damaging iterations of an ATO, a fraudster takes over a person’s account, commits the crime and then changes the account back before the security people or the victim even know what’s happened. Javelin found that total ATO losses reached $5.1 billion last year, a 120% increase from 2016. Victims pay an average of $290 out-of-pocket costs, and spend 16 hours on average to resolve an ATO event.
"Criminals are also gaining access to mobile phones and using the information they find on the victim’s phone to conduct a transaction on another account," says Al Pascual, senior vice president, research director and head of fraud and security at Javelin.
The other study, the 2017 Fraud Index released by Radial last week, found a four-times increase in digital gift card attacks from Thanksgiving to Christmas this past season. In addition, overnight shipping remains a popular actor vector for fraudsters. Radial tracked $1 of fraud for every $13 in purchased goods shipped.
"I think companies have to face that staying ahead of the fraud has become a full-time job, it’s not something you can have your customer service people work in in their spare time," says KC Fox, vice president of payments, tax and fraud at Radial.
Short of that, here are some tips that Javelin’s Pascual offers to prevent fraud:
Turn on two-factor authentication whenever possible. While one-time PINs have become a popular method, especially with financial institutions, Pascual warns that they are not foolproof. He advises enabling tools such as the Google Authenticator or Microsoft Authenticator, which offer far superior two-factor authentication.
Pay attention to mobile security. The vast majority of users have some form of antivirus or antimalware software on their desktops and laptops, but that has not translated to the mobile world. As consumers run more banking and other financial applications on their phones they have to pay more attention to mobile security.
Place a security freeze on your credit reports. Keep in mind this only works when a financial institution uses a credit bureau, but if you are concerned that fraudsters are hacking into your credit information, this makes sense. When the time comes, if you are applying for a home or car loan, you can temporarily lift the freeze.
Sign up for account alerts. This can get cumbersome for users with many accounts, but over time it may make sense for financial institutions to have people sign up for these alerts when they initially register with a bank or credit card company.
Lock down online transactions. Many more financial institution now let consumer set up thresholds for online transactions and will send alerts if it passes a certain dollar limit. For example, if you only authorize online transactions of up to $1,000, the system will alert you on anything above that number.
The Javelin 2018 Identity Fraud Study (registration required for full report) was sponsored by Identity Guard; here is a link to Radial’s 2017 Fraud Index.
Related Content:
About the Author
You May Also Like
DevSecOps/AWS
Oct 17, 2024Social Engineering: New Tricks, New Threats, New Defenses
Oct 23, 202410 Emerging Vulnerabilities Every Enterprise Should Know
Oct 30, 2024Simplify Data Security with Automation
Oct 31, 2024