Fraud Is on the Rise in 2020
Between the myriad of new coronavirus scams and the emergence of more sophisticated fraud techniques, fraud is a growing problem in the United States. Research from Arkose Labs identified 1.1 billion fraud attacks so far this year, and a study from Javelin Strategy & Research found that identity fraud losses have risen about 15 percent, reaching $16.9 billion in 2019. Scammers are getting savvier, taking advantage of new platforms and feeding off the desperation of people who are struggling financially.
“Every day, millions of Americans exchange their personal information for convenience,” said Jason Park, chief growth officer at Allstate Identity Protection. “When you download an app, open an online account or enter your email address, your digital footprint grows. The more data you share, the more likely it is that a criminal can access your personal information and use it for fraudulent purposes. That’s why it’s so important to know who has your data and whether it’s been exposed.”
2020 Trends in Fraud Attacks
Scammers Shift to Account Takeovers
The increase in identity fraud losses occurs as fraudsters evolve from committing credit card fraud to opening fraudulent new accounts and account takeover. Scammers can fraudulently gain access to checking and savings accounts and even high-dollar investment accounts.
This type of fraud escapes detection more often than credit card fraud. Losses from account takeovers shot up 72 percent versus the prior year.
“The data is proof of what we’ve long known: 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. Now it’s time to elevate our understanding of what security, detection and resolution really mean,” said Krista Tedder, head of fraud at Javelin Strategy & Research.
Peer-to-Peer Payments Fraud Is Becoming Even More Popular
As more consumers send money directly through peer-to-peer payment platforms like Venmo and Zelle, more scammers are using these platforms as a way to defraud customers. Between 2016 and 2019, there has been a whopping 733 percent increase in peer-to-peer payment fraud. The instant nature of sending money on a P2P platform makes it ideal for scammers.
Once money is sent over one of these platforms, it can’t be recovered. That’s why P2P payments should only be sent to someone you personally know and trust. If a stranger requests a P2P payment in exchange for merchandise, it’s likely a scam. Since P2P transactions are deemed authorized, you’ll have no recourse to get the money back. If you’re buying from a retailer you’re not familiar with, using a credit card will provide you with the hope of reimbursement.
Most Cybercrime Occurs with Desktop Transactions
While 37 percent of transactions were conducted on mobile, only 21 percent of fraud attacks targeted mobile devices in the first two quarters of 2020. 79 percent of fraud attacks happen during desktop transactions. However, in some industries, such as technology platforms, mobile attacks are more common.
Online Gaming Is Rampant with Fraud
Every second, 65 fraud attacks related to online gaming are reported. Typically, scammers target logins, and these types of attacks have been increasing through the first half of 2020. There’s also been a significant increase in in-game abuse; these types of attacks rose 60 percent in the first quarter of 2020 when compared to the second half of 2019. Some scammers use microtransactions to get you to pay real currency, while others take advantage of in-game virtual currency to commit fraud.
New Coronavirus Scams Are Popping Up
Fraud typically increases during natural disasters, public health emergencies, and other tragedies. They can come in the form of fake charity scams, which take advantage of consumers’ desire to help their community. COVID-19 has also resulted in several scams specific to the virus:
- Product scams, such as fake antibody tests, to steal information or get money for products that don’t work
- Stimulus check scams, in which fraudsters ask consumers to verify their personal information to receive their federal money
- Utility refund scams, in which fraudsters ask for personal information in order to issue a coronavirus-related refund
- Unemployment insurance scams, in which fraudsters use stolen information to access government benefits
- Job scams, such as work-from-home opportunities that are too good to be true
How to Protect Yourself
- Use two-factor authentication. If possible, use temporary passcodes sent to your cell phone to unlock your accounts. However, beware of the vulnerabilities that fraudsters can still take advantage of: Never give anyone a temporary passcode via text or email.
- Protect your devices. Lock your phone and computer with password protection, encrypt any sensitive data stored on your mobile device, and use anti-malware software. You should also be careful accessing any of your private accounts while connected to a public WiFi network; if possible, use a virtual private network (VPN).
- Freeze your credit. Consider instituting a freeze on your credit report, which will prevent fraudsters from opening an account on your name, especially if you were part of a security breach. You’ll need to freeze your reports with all three credit bureaus, and should you need to apply for new credit, you’ll have to lift the freeze. But it’s free to freeze your credit reports at any time.
- Get account alerts. Most financial service providers, including banks and credit card issuers, can alert you of suspicious activity on your account, but you may need to opt in. Sign up for these alerts wherever they are available.
- Verify unknown callers. Scammers can spoof your bank’s phone number. If someone calls or texts you asking you to verify sensitive information, hang up and call your financial institution directly. Never give out personal or financial information to someone you don’t know.