Despite government efforts to curb it, identity fraud has remained a serious threat to the fintech industry. Identity fraud happens when personal information gets stolen and is used to commit a crime.
In a study conducted by Onfido, an identity verification solution provider, it was found that as the number of online transactions becomes bigger, so do scammers. The firm believes that the increase in fraudulent activities is likely to continue as consumers become more comfortable transacting online, with fraudsters staying online with them.
The report also highlights these other trends:
A) Identity fraud has yet to return to pre-pandemic levels. There was a 44% increase in identity fraud since 2019. In 2021, the number of incidents reached an average of 5.9 percent compared to just 4.1% in 2019.
B) Fraudsters continue to target crypto platforms. The number of fraudulent attacks goes up as the price of crypto rises.
C) Medium fraud has risen by 57%. This was primarily driven by organized criminals that favor duplication techniques.
The report also noted that the long-term impact of COVID-19 on a fraudster’s behavior is evidenced by the frequency of fraudulent activities. During pre-COVID-19, fraud attempts followed the general working week. Nowadays, they are up every day of the week. A spike may even be experienced on weekends.
This could mean that more amateurs have moved into the space as part-time fraudsters. It could also mean that fraudsters are trying to take advantage of businesses’ downtime, the report says.