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Friday, June 12, 2020

New study finds uptick in ID fraud

Fraudulent activities are mirroring the ebb and flow of the coronavirus pandemic, according to new findings by LexisNexis Risk Solutions. Researchers identified weekly fluctuations in physical identity fraud in the aftermath of the lockdown begun in mid-March. Additionally, reported cases of stolen identity fraud have exceeded 2019 levels, company representatives stated. "Service providers need to take a risk-based multilayered approach [to navigate the current threat landscape]," said Christopher Schnieper, director of fraud & identity at LexisNexis Risk Solutions. "And part of that is putting the consumer at the center to look at the relative risk and apply the right amount of fraud control."

Schnieper further noted that LexisNexis Risk Solutions researchers had expected the rapid digital commerce migration to lead to opportunistic attacks against first-time ecommerce and mobile consumers. Instead, they were surprised to find increases in physical identity-focused fraud attacks, most notably in new account fraud, he added.

Peaks and valleys

Based on analysis of fraud trends and incidents during the initial eight-week COVID-19 lockdown, LexisNexis Risk Solutions analysts reported the following data points:

  • Growing device populations: New devices are outpacing digital transaction growth.

  • Growing device usage: Connected device usage increased nearly 40 percent in April 2020, compared to average January and February 2020 volumes.

  • Decreasing spoofing attacks: Despite digital growth, device spoofing has decreased by 10 percent during the lockdown period.

  • Increasing email stability: Email address stability improved between March 23 and May 12, 2020, with ecommerce and financial institution emails showing greater tenure.
  • Increasing synthetic fraud: Synthetic identity fraud notably increased between mid-March to mid-May, resulting in a post-lockdown increase of 51 percent when compared to 2019.

Flexible, adaptable approach

"A multilayered approach to risk allows a greater level of flexibility to adapt to new vectors," Schnieper said. "Organizations can become overwhelmed with these digital experiences and their downstream capabilities may not be as automated as they should. They need to adapt quickly to ensure that new applications won't just fall on the floor or end up in a manual pen."

Individuals live in a broad spectrum of general interaction, Schnieper noted. Some transact in digital channels; others prefer to use physical channels. Organizations do a disservice by not having the right type of data to be able to properly evaluate them, he added.

Schnieper also pointed out that generational differences must also be considered, as some generations are more comfortable than others using online and mobile application processes. Organizations need to authenticate users according to the channels they are using and the experiences they expect from each of those channels, he stated.

"View the combination of omnichannel commerce with multilayered security as a matrix, with the Y access being the channel and the X access being the identity authentication modality," Schnieper said. "For a financial application, I may want to do an ID authentication and repopulate the application with a 2D barcode. If someone is just signing up for loyalty on a digital channel, maybe I just need a phone number and email and check the tenure of that email." end of article

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