COSTA MESA, Calif. — With fraud expected to surge amid uncertain economic conditions, Experian has released its 2023 Future of Fraud Forecast, sharing five fraud threats that credit unions will want to share with their members.
“This year’s annual predictions show that fraudsters will use some new deception techniques to outsmart businesses and deceive consumers,” said Experian in releasing its findings.
Experian cited PwC’s Global Economic Crime and Fraud Survey which showed 52% of companies with global annual revenues over $10 billion experienced fraud during the past 24 months and nearly one-in-five reported that their most disruptive incident had a financial impact of more than $50 million.
Experian’s top fraud predictions include:
- Fake texts from the boss. Given the prevalence of remote work, Experian is predicting there’ll be a sharp rise in employer text fraud. “This occurs when the ‘boss’ texts the employee to buy gift cards using a bogus reason, and then asks the employee to email the gift card numbers and codes. Fraudsters then use the gift cards, leaving the employee and/or the company with the expense.”
- Beware of fake job postings and mule schemes. “Amid uncertain economic conditions, Experian predicts fraudsters will create fake remote job postings, specifically designed to lure consumers into applying for the job and providing private details like a social security number and date of birth on a fake employment application,” Experian said. “The job never materializes, and the fraudsters use the information provided to commit identity theft. Experian also predicts that consumers could fall prey to mule recruiting schemes. This happens when people sign up for work from home jobs and unintentionally act as a re-shipper of stolen goods or help move money through their personal bank accounts on behalf of fraudsters.”
- Frankenstein shoppers spell trouble for retailers. “Synthetic identity fraud is the fastest growing financial crime in the United States, according to the Federal Reserve,” Experian said. “This type of fraud involves a fraudster creating a synthetic or ‘Frankenstein’ identity by combining real and false information and opening and building up lines of credit, eventually maxing out their credit limit and never paying it back.”
Experian is predicting a new version of this fraud could result in major losses for retailers in the coming year. Fraudsters can create online shopper profiles using synthetic identities so that the fake shopper’s legitimacy is created to outsmart retailers’ fraud controls. “As the shopper’s profile matures, criminals add stolen payment cards to the accounts. When the fraud eventually occurs, a single synthetic identity will have multiple credit lines to burn through across retailers,” Experian explained.
- Social media shopping fraud. “Experian predicts in-app social commerce fraud could result in millions of dollars in losses,” the company said. “These apps are designed to make shopping easy, intuitive and compelling for consumers to make purchases without leaving the app. This means legitimate brands are racing to make social commerce a part of their sales strategy. However, social commerce currently has very few identity verification and fraud detection controls in place, making the retailers that sell on these platforms easy targets for a surge in fraudulent purchases.”
- Peer-to-peer payment problems. “Consumers love the convenience of peer-to-peer payments and usage continues to grow,” Experian said. “Fraudsters also love peer-to-peer payment methods because they’re an instantaneous and irreversible way to move money, enabling fraudsters to get cash with less work and more profit. Experian predicts fraudsters will gain even more unauthorized access to peer-to-peer payments by using multiple social engineering techniques.
“Consumers will be duped into buying fake items, sending the money to fraudsters and then never receiving their orders,” Experian continued. “They’ll also be tricked into giving their account credentials, enabling fraudsters to send cash to themselves.”
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