A brand new report from Javelin Technique & Analysis means that monetary establishments are failing to maintain tempo with fraudsters. Whereas the general variety of fraudulent incidents went down between 2018 and 2019 (from 14.four million to 13 million), the common assault has turn out to be extra profitable, resulting in a 15 p.c improve (to $16.9 billion) in year-over-year fraud losses.
Nonetheless, what may be much more regarding is that a lot of that loss is being transferred on to shoppers, who shouldered $3.5 billion in out-of-pocket prices. A lot of that may be attributed to the rise in account takeover fraud, which was up 72 p.c for the yr. Fraud can be growing on peer-to-peer fee methods, leaping 733 p.c between 2016 and 2019.
“Scammers are adept at capitalizing on current events and new platforms,” mentioned AARP Director of Fraud Prevention Kathy Stokes. “Using payment apps for anything other than sending money to someone you know presents significant fraud risk for consumers and financial institutions.”
The report advises monetary establishments to implement higher authentication and fraud detection know-how to assist fight the most recent traits. Potential options embody biometric authentication, two-factor authentication, and tokenization, all of which might remove a few of the vulnerabilities related to static passwords.
“These findings should be a wake-up call for financial institutions, the payments industry, businesses and consumers,” mentioned Javelin Head of Fraud Krista Tedder. “The full weight of identity fraud lies not only in counterfeit credit cards and magnetic stripes but in full account takeover and new account fraud.”
Javelin notes that the velocity of account takeover fraud could make it harder to observe, with 40 p.c of the fraudulent exercise going down inside a day of the preliminary takeover. The report itself arrives within the midst of the COVID-19 pandemic, which has coincided with an uptick in social engineering and account takeover assaults as fraudsters attempt to reap the benefits of the disruption brought on by the coronavirus.
The AARP, Allstate Id Safety, and FIS sponsored the 2020 Id Fraud Report.