Fraudsters' New Frontier: Identity Fraud Soars 21% on Social Media

Fraudsters’ New Frontier: Identity Fraud Soars 21% on Social Media

Time Stamp: March 15, 2024 12:06 PM
Fraudsters' New Frontier: Identity Fraud Soars 21% on Social Media PlatoBlockchain Data Intelligence. Vertical Search. Ai.

While the payments and cryptocurrency sectors have
traditionally been prime targets for identity fraud, a recent report
highlighted an increase of more than 21% in attacks targeting the social media
sector.

This report, dubbed Q4 Global Identity Fraud Report by
AU10TIX, suggests a shift in tactics, with organized crime groups aiming to
establish the credibility of fake accounts for later exploitation in money
laundering and terrorism financing activities.

According to the report, identity fraud remains a
significant threat in the digital world, with organized criminals continuously
evolving tactics to exploit vulnerabilities.

AU10TIX identified two distinct patterns of
“mega” identity fraud attacks: the “sudden burst” and the “slow burn”.
The “sudden burst” involves a massive influx of fraudulent attempts over a short
period. For instance, in 2023, organized criminals executed 22,080 attacks
within 2-3 weeks using artificial intelligence.

Conversely, the “slow burn” refers to prolonged attacks
involving around 2000 AI-generated IDs being used 5-6 times per day over 12
months. This trend underscores the sophistication and adaptability of
fraudsters in evading detection.

The report portrayed regional disparities in identity
fraud activities, with North America and APAC experiencing a surge in attacks
on the cryptocurrency sector attacks, driven by the absence of stringent
regulations.

Dan Yerushalmi, the CEO of AU10TIX, mentioned: “We
detected these mega-attacks by cross-referencing anonymized ID data against
AU10TIX’s consortium of 60+ top-tier organizations, demonstrating the power of
collective expertise in identifying complex fraud patterns that may evade
individual entities. Sophisticated AI and deep-fake technology are helping
organized crime groups escalate their attack numbers exponentially, but we will
continue working to make the world a safer and more secure place.”

In contrast, Europe’s implementation of regulations
like the MiCA has mitigated attacks despite the recent Bitcoin frenzy. However, identity fraud in the payment sector remains a prevalent concern globally, emphasizing the
necessity for strengthening security protocols. AU10TIX offered actionable insights to help
organizations safeguard against fraudulent activities in response to the
escalating threat of identity fraud.

Actionable Insights

These include leveraging biometrics,
implementing robust Know-Your-Business, Know-Your-Customer, and Anti-Money
Laundering screening, embracing validation for enhanced privacy and fraud
detection, and remaining vigilant of exploitation of social media platforms by fraudsters.

AU10TIX reported that
the digital payments sector experienced a surge of 56% in fraudulent
activities in its third-quarter report for 2023. Conversely, the cryptocurrency sector reported a decline of 51%
in instances of fraud.

Besides that, the report indicated that the payments sector
was the primary target for organized fraud groups, accounting for 51% of all the attacks. This represents an upsurge from the previous quarter,
where the payments sector accounted for only 32% of attacks. In contrast, the
crypto industry witnessed a decline in fraudulent activities, accounting for
only 23% of attacks.

North America emerged as the most targeted region for fraud
attacks in the payment sector, attributed to economic recovery and increased
spending. On the other hand, the Asia-Pacific region faces challenges due to
the complexity of digital transactions, presenting a loophole for fraudulent
activities.

While the payments and cryptocurrency sectors have
traditionally been prime targets for identity fraud, a recent report
highlighted an increase of more than 21% in attacks targeting the social media
sector.

This report, dubbed Q4 Global Identity Fraud Report by
AU10TIX, suggests a shift in tactics, with organized crime groups aiming to
establish the credibility of fake accounts for later exploitation in money
laundering and terrorism financing activities.

According to the report, identity fraud remains a
significant threat in the digital world, with organized criminals continuously
evolving tactics to exploit vulnerabilities.

AU10TIX identified two distinct patterns of
“mega” identity fraud attacks: the “sudden burst” and the “slow burn”.
The “sudden burst” involves a massive influx of fraudulent attempts over a short
period. For instance, in 2023, organized criminals executed 22,080 attacks
within 2-3 weeks using artificial intelligence.

Conversely, the “slow burn” refers to prolonged attacks
involving around 2000 AI-generated IDs being used 5-6 times per day over 12
months. This trend underscores the sophistication and adaptability of
fraudsters in evading detection.

The report portrayed regional disparities in identity
fraud activities, with North America and APAC experiencing a surge in attacks
on the cryptocurrency sector attacks, driven by the absence of stringent
regulations.

Dan Yerushalmi, the CEO of AU10TIX, mentioned: “We
detected these mega-attacks by cross-referencing anonymized ID data against
AU10TIX’s consortium of 60+ top-tier organizations, demonstrating the power of
collective expertise in identifying complex fraud patterns that may evade
individual entities. Sophisticated AI and deep-fake technology are helping
organized crime groups escalate their attack numbers exponentially, but we will
continue working to make the world a safer and more secure place.”

In contrast, Europe’s implementation of regulations
like the MiCA has mitigated attacks despite the recent Bitcoin frenzy. However, identity fraud in the payment sector remains a prevalent concern globally, emphasizing the
necessity for strengthening security protocols. AU10TIX offered actionable insights to help
organizations safeguard against fraudulent activities in response to the
escalating threat of identity fraud.

Actionable Insights

These include leveraging biometrics,
implementing robust Know-Your-Business, Know-Your-Customer, and Anti-Money
Laundering screening, embracing validation for enhanced privacy and fraud
detection, and remaining vigilant of exploitation of social media platforms by fraudsters.

AU10TIX reported that
the digital payments sector experienced a surge of 56% in fraudulent
activities in its third-quarter report for 2023. Conversely, the cryptocurrency sector reported a decline of 51%
in instances of fraud.

Besides that, the report indicated that the payments sector
was the primary target for organized fraud groups, accounting for 51% of all the attacks. This represents an upsurge from the previous quarter,
where the payments sector accounted for only 32% of attacks. In contrast, the
crypto industry witnessed a decline in fraudulent activities, accounting for
only 23% of attacks.

North America emerged as the most targeted region for fraud
attacks in the payment sector, attributed to economic recovery and increased
spending. On the other hand, the Asia-Pacific region faces challenges due to
the complexity of digital transactions, presenting a loophole for fraudulent
activities.

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