COSTA MESA, Calif.–Five fraud threats in 2024 that both consumers and businesses should be aware of have been released as part of Experian’s 2024 Future of Fraud Forecast.
According to an Experian report, nearly 70% of businesses report that fraud losses have increased in recent years and over half of consumers feel they’re more of a fraud target than a year ago.
“To thwart fraudulent activity in 2024, businesses need to deploy more sophisticated fraud protection solutions that harness the power of data and technology to mitigate risk and protect consumers,” Experian said.
According to Experian, the five fraud threats to watch for include:
Generative AI Accelerates DIY Fraud
“The explosive popularity of generative AI has brought many benefits, but it’s also made fraud more accessible,” the company said.
Experian is forecasting that fraudsters will use generative AI to accelerate “do-it-yourself” fraud with a wide range of deepfake content, such as emails, voice and video as well as code creation to set up scam websites and perpetuate online attacks.
“Fraudsters may also use generative AI to socially engineer ‘proof of life’ schemes,” Experian said. “Using stolen identities, fraudsters will leverage generative AI to create fake identities on social media. They can then interact online with these new profiles that look like a real consumer. This could dramatically increase the number of fraud attacks. To safeguard customers, companies will likely have to utilize multilayered fraud prevention solutions that ‘fight AI with AI’.”
Branches are Cool Again
Experian noted that although there’s been a substantial migration to digital lending experiences, many consumers are heading in-person to bank branches to open new accounts or get financial advice.
“Consumers are doing this as they want to feel safer and think they’re avoiding online security risks by being in-person,” according to Experian. “When it comes to verifying identities at the branch, there can be human error or oversight that can happen in-person.”
According to an Experian report, 85% of consumers report physical biometrics as the most trusted and secure authentication method they’ve recently encountered, but the measure is only currently used by 32% of businesses to detect and protect against fraud.
Experian is forecasting that lenders will introduce more digital identity verification steps, such as physical biometrics, at branches for in-person account openings to protect legitimate customers and mitigate losses.
Retailers Hit with Empty Returns
“With a rise in online shopping, fraudsters have found creative ways to scam some retailers and small businesses,” Experian said. “The customer says they’re returning their purchased item but when the business receives the box, it’s empty. The customer then says they returned the product and it must have gotten lost in the mail.”
Experian is forecasting that more criminals will use this method to keep merchandise in 2024, leaving businesses with lost goods and revenue.
Synthetic Identity Fraud to Surge
Experian noted that during the pandemic, many fraudsters created synthetic identities, but then “quickly found easier methods” to steal funds through various aid programs.
“Though they may have been dormant, these synthetic identities now have a few years of history. Experian predicts this will make it easier to elude detection — leading to fraudsters using those dormant accounts to ‘bust out’ and steal funds over the next year,” the company said.
According to Experian, businesses will need to collaborate more closely than ever with their fraud-prevention partners to review their current portfolios for synthetic identity accounts.
Fraudsters Expand into Cause-Related and Investment Deception
From fake GoFundMe campaigns, social media giveaways, investment opportunities and text fraud, fraudsters are employing new methods that “strike an emotional response” from consumers with cause-related asks or too-good-to-be-real offers to gain access to consumers’ vital, personal information, Experian said.
Experian is predicting these deceptive cause-related methods will “surge” in 2024 and beyond. To avoid becoming victims, consumers will have to be extremely cautious and confirm these opportunities, charities or texts are from the intended party before interacting with them.
During 2023, Experian said its fraud prevention solutions helped clients save more than $12 billion in fraud losses globally.
Now With Free Shipping! The CUToday.info Daily News Email Keeps Getting Better!
The biggest, best and freshest news reporting in credit unions remains free, and now has an added bonus---free shipping to your email address! That’s right. Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?