Coronavirus digital pay spike invites account takeover fraud
According to Javelin Strategy & Research, account takeover hit an estimated 3.6 million victims in 2018 – up from 1.4 million victims two years prior.
As digital transactions during the coronavirus crisis surge, account takeover will be used to access goods and services without much resistance. Fraudsters will look to hide in numbers, especially when purchasing in-demand items that they can resell, such as face masks, disinfectants, etc.
With the increase in online activity because of COVID-19, tracking down and investigating red flags might be more difficult given the volume of transactions on existing accounts, unless strict authentication measures are applied.
With new and changing behavior comes new accounts. As social distancing becomes more prominent, legitimate consumers will likely create many new accounts for food delivery, streaming services, etc. – and so too will fraudsters. New-account fraud, which can be executed using true-name fraud (i.e., stolen information from a real consumer) or synthetic identity fraud (i.e., a mix of information that is stolen/real, fictitious and/or a combination of both), will likely be another area of fraud activity.
Businesses that don’t have strong enrollment measures are most at risk of being defrauded. Conversely, businesses that run multiple points of identity verification in the background, using traditional and nontraditional data, in real time, will be better equipped to stem the tide.
To prevent fraud attempts on new and existing accounts, it’s imperative that companies better manage the entire customer life cycle – from initial enrollment to payments, change events, etc.
Overall, it’s important that legitimate consumers obtain the items they need, especially in times of crisis. It should not, however, come at the expense of fraud.