Methods to Avert Identity Fraud in the Year 2024
In the digital age, identity theft has evolved, with sophisticated methods posing significant threats to businesses and individuals alike. According to the Sumsub 2023 Identity Fraud Report, identity theft is on the rise, and its sophistication is increasing.
Synthetic identity fraud, a method that combines real and fake information to create new identities, is one of the leading trends in 2023. This type of fraud is especially prevalent in auto lending and credit cards, causing substantial economic losses. The use of AI-generated fake IDs is an emerging method, making it difficult for businesses to detect and prevent such fraudulent activities.
Traditional forms of identity theft, such as credit card fraud, phishing attacks, tax-related identity theft, medical identity theft, and the use of fake or forged IDs, still remain widespread. Credit card fraud involves the unauthorized use of stolen credit card information, while phishing attacks trick individuals into revealing personal information. Tax-related identity theft involves filing fraudulent tax returns, and medical identity theft involves stealing personal details to access medical care or insurance benefits.
Financial services, fintech firms, e-commerce platforms, and other industries handling sensitive identity data are prime targets for identity thieves. Criminals exploit weak identity verification systems and operate at scale using these sophisticated fraud methods.
Identity thieves can gain access to sensitive customer data through encrypted data, unsecured networks, or outdated software. ID cards are the most frequently exploited identity documents for identity fraud, accounting for nearly 75% of all fraud involving identity documents.
Businesses can take several steps to protect themselves and their customers from identity theft. Establishing data protection policies that outline how to handle and store customer information is essential. Adopting new technology such as antivirus software, encrypted backups, or DDoS appliances can help protect sensitive data. Limiting access to sensitive data to key personnel and shredding old business records is also crucial.
Businesses should engineer a step-by-step protocol for data breaches, appoint an information security officer, and set deadlines for record keeping. They should also verify the vendors they work with to ensure they protect sensitive data properly. Requesting ID when customers pay by card and rechecking user IDs when there's a change in payment data or the user profile can help prevent identity theft.
In addition, businesses should establish fraud alerts and inspections, use security freezes when the system detects suspicious activity, and manually review unusual transactions if necessary. Using multi-factor authentication, liveness detection, and not collecting unnecessary data can also help prevent identity theft.
Examples of identity theft incidents include a syndicate in Melbourne that used stolen personal data to open 70 accounts at various banking institutions, and San Francisco-based luxury car-sharing service HiGear was forced to shut down due to identity fraud-related theft incidents.
In conclusion, synthetic identity fraud and AI-generated fake IDs are the leading trends in 2023 identity theft, while traditional fraud like credit card theft, phishing, and tax fraud remain widespread. Financial services face the highest losses related to these sophisticated synthetic identities combined with conventional identity theft techniques. By taking proactive measures, businesses can protect themselves and their customers from the harmful effects of identity theft.
[1] Sumsub 2023 Identity Fraud Report [2] Identity Theft Resource Center [3] Federal Trade Commission (FTC)
- In the face of increasing sophistication in identity theft, it is crucial for businesses to stay updated on the latest trends, including synthetic identity fraud and the use of AI-generated fake IDs, as detailed in the Sumsub 2023 Identity Fraud Report.
- Addressing the threats of general-news topics like cybersecurity, crime-and-justice, and technology, businesses must recognize that financial services are prime targets for identity thieves, with conventional identity theft techniques like credit card fraud and phishing still posing significant risks, as reported by the Identity Theft Resource Center and the Federal Trade Commission (FTC).
