No matter what organizations do to enhance security measures, fraudsters will continue to lurk in the shadows. Whether they are attempting to open fraudulent financial accounts, or trying to impersonate a customer in order to access products or services, fraudsters continuously develop tactics that test organizations and industries around the world.
Identifying key fraud trends is necessary so that businesses can detect the activities of fraudsters and take the steps needed to protect their organization – all while still driving revenue and improving the customer acquisition process. With account takeovers and online fraud expected to rise over the next few years, it is more important than ever to enhance identity-proofing techniques in order to fight fraud and minimize risk.
POS Fraud Slipping
Since fraudsters go where the customers are, it’s no surprise that online fraud is expected to become an even bigger problem for businesses in the coming years. According to a recent study by Javelin Strategy & Research, and as reported by DigitalTransactions.net, card-not-present fraud losses are predicted to increase by 90 percent, up to $19 billion, in 2018.
As consumers conduct more and more business online, fraudulent activity at the point of sale is declining. Fraudsters are shifting tactics to try to exploit security weaknesses in the CNP environment, using personal information stolen in a data breach to complete online account takeovers, rather than physical card fraud schemes in stores.
The EMV Technology Mandate
Another main reason online fraud and account takeovers are expected to rise is due to the upcoming EMV mandate in the United States which is actually just a few days away. Since EMV technology is harder to duplicate than the current magnetic-stripe variety in use, criminals are switching up their methods and moving their activities online.
The full adoption of EMV technology will take a few years—hence the shift from POS fraud to online account takeovers. New fraud schemes also come into play, making it necessary for both businesses and their customers to take action to boost identity verification and fraud prevention programs.
New Fraud Schemes Being Employed
Phishing and other online fraud tactics allow cybercriminals to steal information directly from unsuspecting consumers. By tricking these individuals into divulging personal information or prompting them to click on a malicious link, for example, fraudsters are able to get all of the details they need to initiate an account takeover or open a new one undetected.
In order to keep fraud under control and allow legitimate customers easier access while remaining secure, businesses and financial institutions must bolster their identity proofing methods. IDology’s identity verification platform, including our collaborative fraud network, provides an on-demand and customizable solution built to ensure regulatory compliance and increase the efficiency of the verification process. Connect with an IDology representative to learn more about account takeovers and changes in the fraud landscape and how you can team up with a leader in identity verification and fraud prevention. Call (866) 520-1234 today to get started.