Every time a data breach occurs, organizations and consumers around the world feel the effects. For example, information stolen from a retail server can cause trouble for not only the compromised individual, but also for financial institutions, utility companies and other service providers. Robust and multi-layered identity verification methods and collaborative fraud prevention tools are essential to keeping fraud out without increasing friction for legitimate customers.
In IDology’s 2015 Fraud Report, we polled top executives in a range of industries to see what they thought about the impact of data breaches on their industry. Not surprisingly, the rise of widespread data breaches correlated with increased suspected fraud attempts. One respondent in the financial services industry noted that, “account takeover is co-related to data breaches and hence impacts our business.”
Data Breaches Lead to Increased Instances of Suspected Fraud
Based on our findings in our third annual fraud report, information theft, loss or attack seemed to have increased the most this year – from 19% in 2014 to 39% in 2015. We expect this to be, at least in part, a result of the data breaches that have continued to plague the marketplace. Because of this, as well as an increase in new and more sophisticated fraud attack methods, valuable consumer information has become readily available on black markets such as the dark web. Fraudsters can then purchase this identity information and use it to impersonate a legitimate consumer.
As a result, organizations see not only added costs for remediating the impacts of a breach and mitigating fraud such as in account takeovers, but also a decline in customer trust.
Here are what some of our other customers had to say about how data breaches have impacted their industry:
- “Loss of customer trust, cost to remediate fraud impacts and an increased cost to monitor and prevent (cyberattacks).” – President, Medium Enterprise, Financial Services Organization
- “Increase in tax refund fraud, primarily associated with web-based tax preparation software.” – Vice President and Risk Manager, Medium Enterprise, Banking Organization
- “Tighter controls have been implemented across the board because of big name data breaches.” – Director, Medium Enterprise, Healthcare Organization
- “Fraudsters use stolen data to sell what looks to be legitimate financial applications to lending companies. They also use the same stolen data to obtain loans in victims’ names close accounts and steal the loan dollars.” – Vice President, Small Business, Financial Services Organization
Because of this, more organizations are turning to IDology’s identity verification and collaborative fraud prevention platform for help. By using this system, businesses are able to set their own fraud indicators to monitor risk and share information with their industry, to collectively fight against fraudsters.
Enhanced identity verification techniques are customizable, to help you meet your compliance needs, while also ensuring that legitimate customers are approved and cases that need further review are escalated when warranted. Learn more about how data breaches affect your industry by contacting IDology today at (866) 520-1234.