Strategies for Avoiding Identity Fraud in the Year 2024
Identity fraud cases are on the rise, according to the Sumsub 2023 Identity Fraud Report. The report highlights a surge in sophistication among fraudsters, with common methods becoming increasingly complex.
Common Methods of Identity Theft
The primary methods of identity theft in 2023-2024 involve credit card fraud, including opening new accounts with stolen identities, card-not-present scams, account takeovers, and phishing/social engineering attacks. Among these, new account fraud—where criminals use stolen or synthetic identities to open new credit cards—dominates, making up about 90% of credit card fraud cases.
Card-not-present fraud, often involving online or phone transactions, accounts for the largest share of financial losses, estimated around $10 billion in 2024. Other techniques like skimming (physical or electronic theft of card data), account takeovers, and sophisticated phishing also contribute significantly. Synthetic identity fraud, where fabricated identities blend real and fake data, has seen very rapid growth with a 153% increase from late 2023 to 2024.
Most Impacted Age Group
Adults aged 20-49, especially those in their 30s, are the most frequently affected by credit card identity theft reports.
Targeted Sectors
Fraudsters are targeting several sectors, including financial services, e-commerce and digital platforms, older adults, and consumers aged 20-49.
Financial services, particularly credit card issuers and online payment platforms, are a prime target due to the huge losses caused by new account fraud and card-not-present fraud. E-commerce and digital platforms are prone to e-skimming and account takeover fraud. Older adults are targeted by imposter scams, often initiated via phone calls, online ads, or emails, with payment methods involving cryptocurrency, bank transfers, and cash. Consumers aged 20-49 are the most frequently affected by credit card identity theft reports.
Fraud Losses in 2024
Over $12.5 billion in the U.S. was lost due to identity fraud in 2024, with card-not-present fraud causing the largest share (~ $10 billion).
In the fight against identity fraud, credit card number protection is the largest segment in the identity theft protection industry. The growth in online transactions has driven the demand for identity theft protection services, with AI and machine learning playing a key role in fraud detection.
Protecting personal data is crucial in the fight against identity fraud. Fraudsters can obtain personal data through various means, including cyber attacks, data leaks, stealing mail, scavenging personal information on social media platforms, hacking emails, bank accounts, or buying data from the "dark web".
To stay safe, individuals should be vigilant for signs of identity theft, such as unfamiliar or abnormal medical bills, files, bills from unfamiliar companies, suspicious login attempts to online accounts, and confirmation emails for accounts never created.
Businesses can also take steps to protect against identity theft. This includes establishing data protection policies, limiting access to key personnel who work with personal data, shredding old business records, encrypting data before transmitting or storing it, and setting fraud alerts and inspections.
In conclusion, identity fraud is a growing concern, but with vigilance and proactive measures, it can be combated effectively.
Technology advances have made identity fraud more sophisticated, leading to an increasing number of cases as highlighted in the Sumsub 2023 Identity Fraud Report. In the general-news realm of crime-and-justice, this report shows a surge in methods such as credit card fraud, phishing, account takeovers, and synthetic identity fraud, with the latter seeing a 153% increase from late 2023 to 2024.
In the fight against cybersecurity threats, businesses must prioritize data protection, adopting measures like data encryption, limiting access to personal data, and setting up fraud alerts and inspections, just as individuals must stay vigilant to signs of identity theft, such as unfamiliar account activities or unexplained bills.
