A while ago, the leading group in fraud protection Cifas, released its report on the fraud landscape for 2016 and the numbers are devastating.
One of the most important things that anyone working with classified data should know is that if someone can get all the little pieces of the picture, most probably they’ll have the whole picture. However, the big problem here, is that many users are learning this lesson the hard way.
According to Cifas, its members alone prevent £1.1 billion in fraud losses in 2015. And that’s just the tip of the digital iceberg. According to the company’s report, 62% of all fraud and 86% of all identity theft is made possible through the internet. The research also shows that between 2014 and 2015, identify fraud rose 49%, while bank account fraud rose 59%over the same period.
Identity theft is a known enabler of bank account fraud and as social media continues to grow, it is becoming easier and easier for criminals to piece together the personal information of its users. In 2011, 10.6% of identity fraud involved the use of fictitious identities as compared to only 3.6% in 2015, indicating criminals are getting better at reconnaissance of their intended targets.
According to Cifas’ report about 24,000 identity fraud victims were under the age of thirty, a 52% increase over 2014 and more than doubling since 2014. At the same time, 49% of first party fraud was committed by people under the age of thirty. It’s this last statistic that shows how pervasive the problem is.
Usually, fraudsters take advantage of the easiest targets that they are most familiar with, reducing the risk of being caught targeting unknown territory. This number suggests that there needs to be more education focused on our youth as to what fraud is and how to prevent it. The internet generation is the most likely group to publish more details about their personal lives making reconnaissance all but a breeze rather than a chore for criminals.
Fraudsters are also adapting to the changing economic conditions. The research by Cifas shows that the gender gap between males and females is closing with a 4% shift between the sexes. However, forty-year old men, 60.5%, remain the most likely targets of fraud. According to Cifas, this is due to the perception that men in that age bracket are more likely to have access to lines of credit making it lucrative for criminals to target. This shift in behavior may indicate a change in the perception as men being the breadwinners as governments continue tackle problems of the pay gaps associated with gender inequality in business.
In fact, fraud isn’t just increasing among individuals. The U.S. Federal Bureau of Investigation (FBI) has been warning businesses about so-called Business E-Mail Compromise (BEC) campaigns for well over a year. The attack is simple, criminals target C-level executives with well-crafted emails, enticing wire transfers of funds. The emails are real enough, including actual signatures over company seals in some cases, to trick unsuspecting victims to transfer large sums of money. According to the FBI’s Internet Crime Complaint Center (IC3), BEC victims lose $130,000 on average.
Both the Cifas report and the FBI’s warnings are just pieces of a much more global phenomenon. Fraud and attempted fraud is finding its way into some of the very underpinnings of the global finance infrastructure. Once believed to be stalwart of fraud, SWIFT, the global financial network use by banks to transfer billions of dollars, has recently come under attack resulting in an attempt of stealing over a billion dollars from the Central Bank of Bangladesh. Fortunately, the attack only resulted in losing US$81 million but has placed increased scrutiny on the SWIFT network, the integrity of its software, and protection of its infrastructure.
Most probably, fraud will remain a big concern for the developed world, and the emerging markets are becoming a favorite for criminals. Perhaps, there is no greater example of this than Brazil. According to Kaspersky Lab, the up-and-coming country now ranks second worldwide in online banking fraud and financial malware. At the same time, CERT.br claims that security notifications ballooned to 197% in 2014 over 2013. Besides, there was a whopping 80% increase in fake online banking and e-commerce pages and 40% increase in fraud attempts.
Unfortunately, fraud is likely the new normal as we Facebook, Instagram, and Tweet our lives out for the world to see. As the old saying goes, “security is not convenient” and we should be aware at all times.
