Five Fraud Terms For 2024

From fraud in the cryptocurrency sphere to the buzz around fake accounts, digital fraud was a hot topic in 2022.

With smartphone penetration having nearly doubled in the last 7 years, more and more services are continuing to go online to keep up with the rising demand for mobile solutions, including digital banking and gaming, just to name a few.

But the digitalization of everyday activities has widened the attack surface for fraudsters. In the e-commerce industry alone, losses to online payment fraud are expected to reach nearly USD 50 billion in 2023.

There are expected to be 6.84 billion smartphone users this year, which makes it imperative that both businesses and users are aware of the fraud attack possibilities. Here are some key fraud terms to keep in mind for 2023.

Five fraud terms to look out for

1. Fake Accounts

The fight against fake accounts is nowhere close to over. A hotbed for fraudulent activity, fake accounts give rise to countless fraud attacks. From promo abuse to payment fraud and identity theft, fake accounts break trust between a platform and their users.

Fake accounts can also hinder a company’s investment plans. As seen with Elon Musk’s Twitter deal and JPMorgan’s lawsuit against Frank, the prevalence of fake accounts can lead to a trust deficit between businesses and their stakeholders. Investors may be hesitant to take growth and user numbers at face value without any third-party verification.

2. Account Takeovers (ATOs)

An account takeover happens when a fraudster gains unauthorized access to a user’s account using stolen credentials that can be obtained by social engineering or the dark web. Once in the account, fraudsters can buy items using the account holder’s card that has already been stored in the account. If in an e-wallet, they can even get direct access to the funds within. Fraudsters may also change the login credentials to lock genuine users out, or resell the account credentials on the dark web.

With digital and neobanks becoming more commonplace, there is more incentive for fraudsters to conduct account takeovers because these accounts house personal information such as phone numbers, emails, and addresses.

3. Identity Fraud

Deepfake technology has hit the headlines several times over the past few years, and it’s only going to get more prominent. As deepfake technology continues to advance, fraudsters will be able to mimic genuine users’ voice and appearance. This allows them to create synthetic identities and use them to conduct fraud.

4. Friendly Fraud

The current economic situation may cause genuine users to become desperate and resort to friendly fraud as a means of saving money. Friendly fraud happens when an individual makes claims that seem genuine, but actually aren’t. For example, they can try to get a refund by claiming a product was never delivered, or by stating that a delivered product was ordered by someone who took over their account.

5. Digital Trust

As online fraud continues to wreak havoc on the internet, it’s important that businesses know which users to trust, and users are able to trust the platform they’re using.

For businesses, fraud attacks and broken trust go far beyond financial losses. It can have an impact on brand reputation and customer loyalty. And if a business doesn’t trust their customers, they may implement layers of security checks, damaging the customer experience.

What this means for your online business

As mobile devices remain the go-to and more apps are developed to simplify daily activities, it’s crucial that online businesses invest in a risk intelligence solution to stop fraud and build trust while they continue to grow.