The Green Sheet Online Edition

January 23, 2023 • Issue 23:01:02

Fraud trends in 2022 to watch out for in 2023

By Nicholas Cucci
Fluid Pay

The growing digital world is making it easier than ever for us to connect and learn more, but it also places each of us at a heightened level of risk. Each year, cybersecurity experts learn more about how to navigate fraud, but their efforts haven't eradicated it. As more fraudsters are strengthened by powerful technology, their attacks are becoming more complex. In this article, we will address some of the most commonly seen trends from 2022.

What are fraud trends and why do they exist?

Fraud trends are common recurrences of fraudulent behavior that we see each year. These trends often roll through different areas, impacting large numbers of people at different times. A type of fraud becomes a trend when an increasing number of companies begin to see it influencing their businesses—or more individuals start to fall victim to it. Already, organized digital fraud is expected to reach $10.5 million in damages each year by 2025 (see cybersecurityventures.com/cybercrime-damage-costs-10-trillion-by-2025).

It can seem odd that fraud trends exist, but it makes sense when you think about it. As more fraudsters realize they can get away with a certain type of fraud, more people start doing it. Sometimes, an increasing number of fraudsters happens individual by individual, but it can also be a part of a growing, orchestrated attack. We often think of those who commit fraud as one-off shady actors, but these attacks can be fairly advanced (see bit.ly/3kaDCqw).

Fraud trends to watch out for

Finding the right way to push back against fraud is important, but being able to identify it is the best thing that you can do. When you know what to look for, you will be less likely to become a victim of fraud. Keep an eye out for the following trends to protect your money and identity.

• Text phishing: Phishing scams have been common for so long that most of us routinely discourage vulnerable relatives from opening questionable emails. However, phishing fraud has taken on a new look. Knowing that most people don't read spam emails anymore, fraud groups have transitioned to text-based scams. Now, they are using your phone number to send text messages with questionable links, often pretending to offer updates about royalty programs or delivery details for online purchases.
• Spam bots: More people are using third-party tools to block spam bots and robocalls because their volume has become overwhelming. Organized crime groups target mobile phone owners at volume using robots to spam-dial them all. These bots offer to connect phone owners with a "live representative" or ask them to offer sensitive details. Typically, these pretend to be organizations you might be connected with and often use local phone numbers to appear more realistic. Leaked data bots: We love Amazon's ability to tell us what to buy next, but not all robots are used for good. At their core, bots can do a series of tasks at lightning speed, which makes them capable of doing more than humans can possibly do with leaked data.
  Between the first and third quarters of 2022, roughly 15 million data records were exposed online (see bit.ly/3GD2OO5). Previously, leaked data would have to be manually entered by someone. Now, criminals use bots and leaked data to find ways into victims' other accounts. When people use the same login information for multiple accounts, someone can get the login for one account and use bots to see what other websites it might work for.
• Digital identity fraud: We live in an era of impersonation, which is commonly seen online. Already, people are using fake profiles and online tools to impersonate other individuals. Whether it's someone using your photo to ask your uncle for money or a stranger using your online notoriety to sell products to your audience under your name, these takeovers are a recipe for disaster.
• Spying apps: In-app browsers are quickly becoming the new standard, but they might not be as convenient as you think. In fact, some apps monitor what users do when they use the browser through their app. This means people may be unknowingly giving data away to the people responsible for running the app—and this can often go well-beyond browsers. Android users, in particular, are at heightened risk of having their data stolen from third-party apps. It's always best to use apps you can trust and be aware of the service agreements in place.
• Digital sales fraud: The gig economy is thriving, and more people are finding exactly what they want online. Of course, not all so-called online businesses are as dedicated as they pretend to be. Due to the growing number of ways to sell online, con artists and criminals are taking a larger interest in online marketplaces. When shopping online, customers run the risk of purchasing low-quality products or even purchasing services from someone who might not be qualified at all. Be sure to look at reviews and work with people who seem like credible business owners.
• Chargebacks: Although digital customers are at risk of fraud, so are online business owners. Familiar with the digital payment gateways and payment types used for online transactions, fraudsters are realizing that protective measures for customers can be weaponized. More digital business owners are experiencing a form of fraud where customers purchase something, then contact their credit card company to have the money refunded. In the end, these individuals get the product or service for free, leaving business owners to take the loss.

A percentage of people invariably have criminal intent when interacting with the public. That is why we all must remain informed and vigilant. As long as we take active steps to recognize and push back against fraud, we lower the level of damage that these individuals can cause. Every year, be sure to catch up on trends—and if you see something concerning online, always look into it. It is best to exercise caution and be informed about the potential risks.

Nicholas Cucci is the co-founder and COO of Fluid Pay LLC. He is also a graduate of Benedictine University and a member of the Advisory Board and Anti-Fraud Technology Committee for the Association of Certified Fraud Examiners, as a CFE himself. Fluid Pay is the only 100 percent cloud-based Level 1 PCI payment gateway processing transactions anywhere in the world. Contact Nick at nick@fluidpay.com.

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