Study: New technology leading to increase in fraud
Fraud jumps year-over-year, leading to growing consumer worry.
Fraudulent transactions in the first half of 2024 were up over 73% year-over-year, and suspected fraudulent transactions increased by over 84%, according to the 2024 Mid-Year Identity Fraud Review released by AuthenticID, an identity verification and fraud prevention solution. Nearly two-thirds (63%) of financial firms reported an overall fraud increase of at least 6% within 12 months, with digital channels accounting for half of the overall fraud losses.
A surge in AI-enabled fraud, as well as the increased use of deepfakes for identity fraud tactics like account takeover attacks and injection attacks, is having a significant impact on fraud trends and consumer sentiment. Four-in-10 (40%) of survey respondents have already had their personal data exposed as part of a breach in 2024, and 68% of people said that the threat of identity fraud impacts how they make purchases, open accounts, and do business.
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Of all fraudulent activity reported in the first half of the year, 78% involved ID verification fraud such as headshot manipulation, fake signatures, barcode text analysis and more. A vast majority (91) of people surveyed could not select a real person from a line of deepfake headshots.
When it comes to digital identity credentials versus physical identity documents, the survey found that consumers are a bit more likely to hold on to their physical wallets, with 47% of consumers preferring a physical wallet over a digital one. Only 19% said they prefer a digital waller alone, and a third (32%) said they would use both, depending on the circumstances.
"What we’ve seen thus far in 2024 is that identity crime will continue to hit record highs, targeting both businesses and consumers,” said Blair Cohen, AuthenticID founder and president. “With the proliferation of new, generative AI-powered tools for fraudsters, businesses and consumers alike face a significant challenge in the form of breaches and business attacks. But those same generative AI-powered tools can also stop fraud. It's up to businesses to stay ahead of fraud as it continues to evolve – fast.”
