Consumers cornered by the burden of fraud


Sophisticated and sophisticated types of fraud remain at high levels, despite the widespread adoption of anti-fraud measures. The recent move to EMV cards is helping to limit existing fraud, which has seen the largest decline in all types of fraud in 2018. Yet, card fraud losses have risen from $ 8.1 billion in 2017 to $ 6.4 billion and their incidence has gone from 5.47% to The types of high-impact fraud such as account takeover and new accounts remain alarming, revealed the 2019 study on the identity fraud of Javelin Strategy & Research. The firm's statistics show that fraudsters continue to find and compromise new goals.

In 2018, 14.4 million consumers were victims of fraud. This represents a significant decrease from the record of 16.7 million recorded in 2017, but the victims bore in 2018 a burden much heavier than those of the last years: 3.3 million were victims of fraud, almost three times more than in 2016, and the cost of fraud against victims has more than doubled in two years to reach $ 1.7 billion in 2018.

"While the decline in card fraud rates is definitely good news for victims, fraudsters have focused on opening and supporting accounts," said Al Pascual, executive vice president of Javelin, Director of Research and Head of Fraud and Security. "As financial institutions and other organizations modernize their account opening processes, it is critical that they incorporate tools such as document scanning, behavioral risk assessment, and digital identity. This will streamline digital applications while challenging fraudsters. "

The study found that the overall incidence of fraud and fraud losses decreased in 2018, from 6.64% to 5.66% and from 16.8 billion to 14.7 billion, respectively . The event and losses resulting from the acquisition of accounts decreased year-on-year from 1.58% to 1.43% and from $ 5.1 billion to $ 4.0 billion. levels remained much higher than in previous years.

Losses from new account fraud increased slightly from $ 3.0 billion to $ 3.4 billion, with fraudsters moving beyond traditional card fraud. Losses have increased for unconventional account objectives such as mortgages, student loans and auto loans. Fraudsters have also stepped up their attacks on peripheral financial accounts such as loyalty and rewards programs and retirement accounts. These types of accounts, generally considered "second-level" by fraudsters, have been less important targets because of the difficulty of monetizing them.

Meanwhile, fraudsters are becoming more and more apt to overcome the challenges of authentication. Takeovers of mobile phone accounts have almost doubled, from 380,000 in 2017 to nearly 680,000 in 2018. They allow fraudsters to intercept single-use alerts and passwords sent via SMS. one of the most common forms of enhanced authentication today.

"Given the agility and tenacity shown by fraudsters in 2018, financial institutions should assume that each type of account will be under increased pressure," said Jim Johnson, Executive Vice President, Financial payments and wealth, FIS. "Adequate defense of clients against these new attacks from seucity will require the development and adoption of next-generation fraud mitigation strategies."

The annual survey is a comprehensive analysis of trends in identity fraud, independently produced by Javelin. The main sponsor of this study is FIS, a provider of financial services technologies. Other sponsors include Experian, an information services company, and educational partner GIACT, a payment fraud company. This is the sixteenth study in a row, with 79,000 consumers surveyed so far since 2003.