Spotlight on cybercrime as online fraud doubles during pandemic
With a number of people using eCommerce for the first time and employees working at home, the costs of cybercrime exceeded $1tn in 2020, up 50% from 2018.
While some criminals’ tactics were obvious, others are extremely obscure, highlighting the importance researching the latest cybercrime trends to protect you and your company. Therefore, we felt it important to produce a dictionary of online fraud and cybersecurity terms that will give you a good overview of where the industry is at the moment. However, in this article we’ll be looking into some of the most prominent forms of fraud online today.
The rise of ‘Vishing’
Today, near-perfect deepfakes like this video of ‘Tom Cruise’ are possible using professional lookalikes and Hollywood-level effects technology, but similar technology is trickling down to fraudsters.
For decades, if a system administrator at a large company was to get a call from their CEO asking for their password to be reset, they would have complied without question as they recognised the voice. However, today they need to be wary of being ‘Vished’, or ‘voice phished’. This will lead to a raft of new security procedures within businesses in the coming years.
COVID has caused identity theft to double
Reports of identity theft doubled from 2019 to 2020 according to the FTC, primarily due to the pandemic. It is also surprising how varied the tactics of identity thieves are, ranging from stealing mail from rich neighbourhoods to harvesting data through public wi-fi networks.
COVID created the perfect storm from increased internet use, including many people using eCommerce for the first time, and an increased number of people either becoming unemployed or having their income significantly reduced. This led to a huge rise in identify theft for the purposes of applying to unemployment benefits multiple times. The two rounds of pandemic stimulus and multiple state and federal relief programs have also incentivised fraudsters to impersonate individuals and businesses.
The damage caused by low-level fraud
There are tens of thousands of low-level fraudsters running penny ante scams, however these are at a high enough rate that they are a major concern for online retailers and businesses.
An example is, ‘Account Farming’, the practice of creating multiple authentic-looking accounts on social media sites then selling them to unscrupulous companies for the purpose of posting fake reviews adding followers to a new account or harassment. As most social media sites take fake accounts very seriously, it is difficult and time-consuming to create new accounts, making the practice at best a supplemental income for amateur fraudsters, but enough do it to make it a serious problem.
Another common example of low-level fraud is ‘wardrobing’, where someone buys a product, uses it and returns it later. This common type of fraud is estimated to cost around $18.4 billion dollars annually.
Alternatively, some people allow criminals to use their identities or online accounts in criminal enterprises in exchange for a share of the profits. Others act as ‘money mules’, transferring money from one account to another, as part of a long chain. Again, the individual rewards are low, but with enough people doing it, this type of fraud can be very difficult to stop.
AI developed to fight fraud
As the cybersecurity industry is growing rapidly, with an estimate compound growth rate of 10% per year, it is difficult to keep up with threats manually and businesses may have to turn to artificial intelligence (AI) to help.
AI systems can gather information about eCommerce users from all parts of their digital footprint, to create a complete digital picture. If that picture raises too many red flags, then this can be actioned, manually or automatically. Therefore, although this current boom in digital crime is damaging, it is extremely positive how quickly industries around the world will be able to supplement their own fraud prevention activity with AI tools.