Javelin, a research and strategy consultancy, released its 2020 Identity Fraud Study, entitled ‘Genesis of the Identity Fraud Crisis’. It provides a statistical overview of the scope of the global identity fraud problem, and provides guidance for how organizations can manage it.
‘The results of Javelin’s 2020 Identity Fraud Survey serve as a wake-up call—one that will force financial institutions, businesses, and the payment industry to reevaluate how identity fraud is managed,” Javelin said in a post to its website. “Total identity fraud reached $16.9 billion (USD) in 2019, yet the dollar loss is only part of the story.”
The biggest takeaway from the report is the rapidly evolving shift in the nature of identity fraud. Javelin states that the days of the biggest threat being fraudsters counterfeiting credit cards are long gone. Today’s fraudsters user sophisticated techniques to steal personal data that can be used in checking and savings account takeovers.
Account takeovers come in a variety of formats. However, the most successful fraudster techniques involve generating fear in a target victim. Scared individuals are much more likely to forget basic information safety protocols. That results in huge mistakes that causes fraudsters to gain access to personal data.
In the report, Javelin predicts that the stress caused by the Coronva virus induced recession will exacerbate this phenomenon. This is in-line with other predictions made by experts that study the relationship between fraud rates and economic recessions. Javelin also expects financial services to experience the highest uptick in fraud rates as a result.
“During the next twelve months, criminals will strike at the heart of the financial services industry and negatively affect consumers,” Javelin said. “Areas of concern range from fraudulent account openings (synthetic identities), person to person (P2P), and full takeover of all accounts, not just checking or cards but also investment accounts and other high-dollar balances.”
The report also lays out ways merchants can help customers safeguard their data. Crucially, it stresses the need to emphasize proactive, consumer-focues measures to prevent data theft. Monitoring for breaches, while necessary, should be considered as a secondary goal to prevention.
To that end, the report provides a number of suggestions to suggest to consumers, including the use of two-factor authentication, digital wallets, and securing information stored within devices.
To learn more, see the full report on Javelin’s website.