Fraudsters attempt account takeovers as payment cards become more secure
In the U.S., rising use of payment cards with embedded chips saw fraud losses decline in 2018 to $14.7 billion from $16.8 billion in 2017, according to research firm Javelin Strategy. In its 2019 Identity Fraud Study, which is based on a survey of 5,000 U.S. adults, Javelin also estimated that losses due to account takeover decreased year-over-year from $5.1 billion to $4.0 billion.
However, Javelin believes fraudsters are becoming better at circumventing authentication tests, according to an article in the Credit Union Times. Takeovers of mobile phone accounts rose to nearly 680,000 in 2018 from 380,000 in 2017, according to Javelin. The article noted that fraudsters are seeking to intercept alerts and one-time passwords sent by text message, one of the most prevalent forms of “step-up authentication” used today.
Meanwhile, Verizon’s Mobile Security Index 2019, found that one third of the 671 organisations it surveyed had suffered a compromise involving a mobile device, up from 27% in its 2018 report.
“As financial institutions and other organisations modernise account opening processes, it’s paramount that they incorporate tools like document scanning, behavioural risk assessments and digital identity,” said Al Pascual, Javelin strategy and research SVP, research director and head of fraud and security. “This will streamline digital applications while challenging fraudsters.”
The lead sponsor of the Javelin study is financial services technology provider FIS. Other sponsors include information services company Experian and educational partner GIACT, a payment fraud mitigation company.