Federal Trade Commission (FTC) reported nearly 5.7 million cases of identity fraud including 1.4 million cases of identity theft. This surge in cases of ID fraud indicates that fraud has become a growing problem that needs to be mitigated promptly otherwise consequences could be devastating.
A Quick Insights into Identity Fraud & How it Takes Place?
Identity fraud detection is a broad term used for various fraudulent techniques where personally identifiable information (PII) of victims is compromised and employed to conduct nefarious activities. PII including name, date of birth, credit card numbers, social security numbers, or other confidential information that acts as cybercriminals exploit the identity of a person for multiple purposes. It is often employed to access bank accounts, open social media accounts, or dodge identity verification solutions.
- Phishing: It refers to a fraudulent technique where scammers pose to be a legitimate entity and contact you via email, text messages, or calls asking for confidential information. Vulnerable individuals believe that legitimate authorities are contacting them and end up sharing their sensitive information.
- Social Engineering: Cybercriminals coax unsuspecting people into sharing their personal information by taking advantage of human psychology.
- Pretexting refers to an online scam where fraudsters construct fabricated stories to manipulate victims. A common instance includes CEO fraud where scammers pose to be the CEO of the company and ask for some sensitive information required for some system updates. A survey reveals that 51% of people share their confidential information without validating the authenticity of the resource.
ID fraud is a serious crime that affects individuals and organizations as well, affecting the victims badly and leaving far-reaching psychosocial consequences. The aftereffects are devastating causing financial losses, tormenting the reputational image, and imposing serious mental distress.
Common types of ID fraud Everyone Must Know
Advanced technology has streamlined many aspects of our daily lives, where technology in the wrong hands is employed to conduct illicit activities with a better approach. Cybercriminals use advanced technologies and sophisticated techniques to accomplish nefarious activities for personal gains. Let’s explore common types of ID fraud that need everyone’s attention to effectively mitigate the ever-evolving ID theft & fraud.
1. Credit Card Fraud
This scam involves fraudsters gaining access to victims’ credit card details and using this information to infiltrate financial systems. They employ online hacking, skimming devices, and credit card readers to obtain credit card information, which they then use to conduct financial transactions and wire transfers.
2. Medical ID Fraud
Cybercriminals leave no avenue unexplored to get their hands on other’s sensitive information and employ it for personal benefits. They even acquire patients’ medical card information and use it to gain access to medical services & privileges, diverting resources from deserving individuals.
3. Account Takeover (ATO) Fraud
It is a type of fraudulent activity where scammers manage to get the login credentials of digital accounts which could be online bank accounts, social media accounts, or online shopping accounts. Fraudsters sneak into these digital accounts and use them for multiple purposes like conducting financial transactions, spreading false information, or tormenting victim’s social image.
4. Synthetic Identity Theft
As the name indicates, it refers to a fraudulent technique where scammers merge others’ sensitive information with fabricated information to generate a whole new identity to evade authentication systems and conduct illegitimate activities.
Best Strategies for Identity Fraud Detection & Prevention
It’s evident that ID theft & fraud are surging at a distressing rate and scammers are continuously evolving their fraudulent tactics with advanced technology. A study suggests that nearly 95% of organizations globally fell victim to the infamous trap of ID fraud, causing the loss of millions of dollars each year. This loss can be overcome by implementing sophisticated fraud detection techniques, advanced tools, and technologies.
Biometric Authentication
Verifying claimed identities based on unique biological characteristics such as fingerprints, facial patterns, or retina or iris patterns can ensure accurate authentication of genuine individuals, actively spotting deceptive identities. Biometric verification adds an extra layer of security to online ID verification, warding off fraudulent entries.
Liveness Detection
Liveness detection is an advanced technique that accurately confirms the liveness of the claimed identity, indicating whether the identity is real or not. By analyzing specific movements or facial key points, the system authenticates genuine individuals in real time and spots fake identities, denying them access.
AI and Machine Learning
Advanced AI algorithms can analyze a vast amount of identities and actively flag the fabricated identities. As these algorithms and machine learning models can learn and adapt any upgrades to the registered identities, they can easily authenticate genuine persons and detect presentation attacks.
Final Thoughts
The rising threats of identity fraud detection call for the implementation of robust ID verification technology integrated with liveness detection and sophisticated AI algorithms to spot deceptive identities in real time. To stay ahead of the curve, individuals should stay alert, validate the authenticity of entities before sharing confidential information, reduce their digital footprints, and keep updated with the latest cyber threats.
