A recent survey from Cifas, a UK fraud consortium, highlights an alarming trend in criminal tactics that signals the escalation of fraud beyond simple growth into more sophisticated methods.
Multitude of Fraud Reports
For the first six months of this year, Cifas reported a record number of fraud cases through its National Fraud Database (NFD), indicating that traditional methods are being overtaken by smarter, often AI-driven techniques. While identity fraud saw a 7% decrease from the previous year, this drop is attributed to criminals shifting their strategies rather than a reduction in fraudulent activities.
Account Takeovers and Mobile Devices
The survey also points out that account takeover, especially through mobile devices, has become more prevalent. Cybercriminals are utilizing advanced tools, including AI-driven systems, which not only make these attacks easier but increase their likelihood of success.
Rise in First-Party Fraud
Another significant trend is the increased occurrence of first-party fraud, where legitimate users abuse their own accounts for malicious purposes. According to Cifas, misuse of facility cases have surged by 35%, driven partly by consumers who perceive it as a victimless crime amidst rising inflation and interest rates.
FICO Research
A separate study from FICO supports this trend, with one-third of respondents believing that falsifying credit applications is justified in certain situations. First-party fraud has become the most common form globally, often seen by consumers as a way to cope with financial difficulties without significant legal repercussions.
Financial Strain and Identity Selling
The strain on finances has led some individuals to desperate measures such as selling their identities, believing they can benefit from temporary financial gains. However, Cifas warns that these actions often result in long-term damage to credit scores, with fraudsters frequently using the stolen identities for unauthorized loans or credit cards.
FICO also cautions against misleading credit card applications, highlighting that while such practices might offer short-term relief, they can lead to severe financial complications and legal issues down the line.
