Fraud has become a prevalent crime in today’s fast-paced modern world, as fraudsters have become sophisticated with technological innovation and upgraded their nefarious ways to deceive people. Identity fraud, the most prevalent type of fraud, is increasing at an alarming rate, affecting both consumers and businesses. Research by the European Commission reveals that nearly 20% of European residents fell into the trap of widespread ID fraud in the last past years. Another study by the National Council of Identity Theft Protection uncovered that 1 in 3 Europeans have been victims of this looming threat.
Quick Insights into Identity Fraud
ID fraud is a deceptive technique employed by fraudsters, where others’ personally identifiable information (PII) including name, date of birth, social security numbers, credit card numbers, or other data is obtained to conduct illicit activities for personal gains. PII may be used to open bank accounts, log into digital accounts, apply for official documents, or conduct illicit activities in the disguise of genuine individuals.
This looming threat is affecting hundreds of millions of people and imposing serious consequences on the victims. Consumers as well as businesses are prone to this fraudulent act, highlighting how essential it is to establish robust identity fraud prevention strategies to mitigate the long-lasting effects.
Differentiating Identity Theft & Identity Fraud
ID theft & ID fraud are often confused and used interchangeably. Before navigating the topic deeper, let’s explore the subtle difference between both terms. ID theft refers to stealing or hacking other’s sensitive information via phishing attacks, social engineering, or data breaches. The stolen or manipulatively acquired information is often sold on the dark web to gain financial benefits. On the other side, ID fraud refers to the deceptive art of employing stolen or spoofed information to conduct fraudulent activities.
Common Types of ID Fraud Everyone Must Know
ID fraud is continuously evolving and comes in various forms, as cybercriminals leave no avenue unexplored to accomplish their unethical targets. Imposters target vulnerable people and manipulate them into sharing their sensitive information which is further employed for malicious purposes. Identity fraud detection has become more paramount than ever before, as the threats are evolving with time. Let’s briefly explore the common types of ID fraud that everyone must be aware of, to timely mitigate fraudulent activities.
- Credit Card Fraud
Credit card fraud is the type of deceptive technique where imposters use other’s credit card details to conduct financial transactions and make potential wire transfers. Using skimming devices, social engineering tactics, or phishing attempts, bad actors get their hands on credit card details and use the acquired information to sneak into financial systems. Often credit card readers, stolen credit cards, and online hacking are utilized to execute credit card fraud.
- Account Takeover (ATO) Fraud
This is the type of ID fraud where imposters somehow get access to other’s digital accounts. The accounts could be bank accounts, online shopping accounts, e-commerce, or social media accounts. After attaining access to the digital accounts, imposters perform malicious activities for financial gains. Employing social engineering tactics, hacking, phishing, or installing malware into the victim’s device, malicious actors manage to acquire credentials for digital accounts and use the information to log into accounts to conduct illicit activities.
- Medical ID Fraud
Malicious actors leave no stone unturned to accomplish their illicit maneuvers and sneak into services & privileges. Medical ID fraud is surging at a distressing rate, imposters get their hands on patient’s medical identities and use the information to avail of medical services. The stolen or manipulatively acquired medical information of patients is utilized to avail medical services & benefits like medical treatments or filing insurance claims. This deceptive act not only impacts victims with financial losses but also leaves them with mental distress.
- Synthetic Identity Theft
As the name suggests, this deceptive technique refers to creating a fake identity by blending genuine information with fabricated information. Imposters utilize phishing and social engineering tactics to access other’s sensitive information and blend the information with fabricated information like fake names or dates of birth to generate a whole new identity. The newly generated ID is substantially used to open credit accounts, make fraudulent purchases or transactions, and evade detection by the authentication systems.
- Unemployment Fraud
Unemployment fraud refers to a technique where malicious actors engage in deceptive practices to claim unemployment benefits in the disguise of unemployed individuals. In many countries, governments grant benefits to unemployed individuals to help them maintain a reasonable standard of living. Unemployment fraud comes in various forms, where imposters steal others’s information to claim false benefits while still employed and avail unemployment benefits in the name of others without their knowledge.
Final Thoughts
ID fraud is continuously evolving with advancements in technology and imposes long-lasting effects on the victims. To mitigate the looming threats of ID fraud, it’s essential to develop effective identity fraud detection measures to stay ahead of the curve. Users can mitigate the rising threats of ID fraud by staying cautious, continuously monitoring their account activities, confirming the legitimacy of sources before sharing information, reducing digital footprints, and using strong passwords for their digital accounts. Organizations must employ robust authentication systems integrated with advanced artificial intelligence to actively flag fake identities.
Also Read: https://usatimenetwork.com/
