The payments industry is falling behind fast-acting fraudsters
Financial institutions, retailers and mobile wallet providers struggle to keep up with changing fraud patterns. Fraudsters have become increasingly more sophisticated, creating networks around the world that run like legitimate businesses, for the sole purpose of perpetuating mobile fraud.
Today, fraud is managed like a high-tech operation, with multiple hired professionals at different organizational levels.
Organized-crime-like fraud syndicates hire professionals with coding skills, distribution capabilities, money mules and fraud specialists who have access to stolen credentials, hacked smartphones and fraudulent SIM cards. The result is an advanced network of fraudsters with diverse and cutting-edge tools and schemes.
Today’s mobile fraud takes on numerous forms. Account takeover has become a growing trend fueled by a rise in large-scale data breaches and an increasing amount of PII available on the dark web.
Transaction fraud occurs when a stolen payment card or data is used to generate an unauthorized transaction. The move to real-time transactions is causing significant security challenges for banks, merchants and issuers. Quicker transaction times increase the chances of fraudulent transactions going undetected. Effective protection relies on accurately distinguishing between legitimate customers and fraudsters in real time.
New-account fraud is another common mobile threat that has been impacting organizations processing mobile transactions. New-account fraud includes taking over existing identities or creating fake identities, resulting in millions of dollars lost for retailers.
And SIM swap has recently become a common mobile fraud scheme-of-choice. SIM-SWAP occurs when someone persuades a mobile carrier to switch your phone number over to a SIM card they own. Bad guys are not doing it to hoax you or to rack up long-distance charges. They are doing it to amass big bucks by diverting your incoming messages, to easily override text-based authentication that protects your most sensitive accounts.