Javelin Strategy & Research is warning about the growing threat of identity fraud. In doing so, the firm called particular attention to the dangers of identity fraud scams, which accounted for $43 billion of the $56 billion lost to identity fraud in 2020.
In that regard, Javelin made a distinction between identity fraud scams and traditional identity fraud. In the latter instance, the victim will often not know how their data was compromised. In the case of a scam, on the other hand, the victim can often pinpoint a single point of contact that they may have had with a fraudster, whether that communication occurred over the phone, via email, or through a social media platform.
According to Javelin, cybercriminals have started going after victims directly because improved anti-fraud technologies have made it more difficult to carry out traditional attacks against financial institutions. Individual consumers are not as savvy. They may not notice a misspelled email address, or may not be sufficiently wary of strange financial requests that seem like they come from legitimate financial institutions.
Javelin attributed some of the shift to COVID-19, insofar as the pandemic forced more people to conduct more of their business online, and the increased digital traffic made it easier for scammers to slip through the cracks. Digital transformations also created more vulnerabilities for fraudsters to exploit. For example, cybercriminals have tried to get their hands on stimulus payments and unemployment benefits during the pandemic.
Financial institutions, meanwhile, will risk losing customers if they don’t get the situation under control. Javelin reported that a full third of identity fraud victims felt that their situation was not properly resolved, and 38 percent closed their accounts with that institution as a result.
Javelin noted that consumers are becoming more receptive to biometric authentication practices. With that in mind, the firm encourages financial institutions to adopt technologies like face and fingerprint recognition to protect customers and deliver more convenient service.
March 23, 2021 – by Eric Weiss