Online fraud attempts are up 25% in the US—here's why
From identity theft to phishing attempts, the number of digital fraud attempts in the U.S. is up 25.07% in the first four months of 2021, compared to the last four months of 2020.
That's according to a new report from TransUnion, which found that when looking at specific industries, digital fraud attacks against financial services companies increased 109% in the U.S. during that same period. Globally, fraud attempts in this industry were up 149%.
TransUnion defines digital fraud as any online scams or fraudulent transactions. That includes schemes where fraudsters attempt to steal personal information through social media networks and online sites and phishing attempts, which occur when cyber criminals send fake emails to you that either attempt to retrieve personal information or infect a device with malware.
"Part of the reason why we're still seeing an uptick is because, globally, we're opening up more, businesses are opening up more. You can dine now in person and people are more comfortable shopping in person," says Melissa Gaddis, senior director of customer success and part of the global fraud solutions team at TransUnion.
Financial services companies like banks and investment companies are particularly attractive targets because there are "big dollars there," Gaddis says. People have been doing more online transactions since the pandemic hit and cyber criminals know it, so they're attempting to cash in.
Fraudsters who have been successful (or think they've been successful) at gaining someone's personal information are taking it to the next level by trying to obtain credit cards or take over bank accounts, Gaddis says.
Beyond financial services, TransUnion found that the travel industry saw the second-highest level of digital fraud attempts at the beginning of this year — up 25% globally. Gaddis says this is because the number of transactions within the travel industry dropped dramatically during the pandemic and is now starting to bounce back.
"It's definitely on the uptick and that just gives an open field for fraudsters to try to monetize those as well," Gaddis says.
While it is, to some extent, a business' responsibility to ensure customers are protected from fraud, Gaddis says customers should also be responsible as well. That includes signing up for and using protections such as two-factor authentication, which generally requires users to not only enter a password, but also confirm their identity by entering a code texted or emailed to them.
Using strong, different passwords for each account also helps. If it's a struggle to remember all the passwords, consider getting a password manager like Dashlane (free limited version, unlimited password plan is $4.99 a month). These programs automatically generate unique, secure passwords for all your accounts and remember them for you.
"While it absolutely is the responsibility of the business to protect the assets and protect the consumer, I think consumers also can do some things on their side to add a layer of protection for themselves," Gaddis says.
These fraud attempts are not likely to decrease anytime soon, she adds. "I do believe there is going to be a permanent shift to businesses having more digital transactions," she says. That means cyber criminals will continue their attacks.
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