5 Fraud Threats to Watch for in 2023
Technology is getting stronger, and so are the fraudulent schemes and attacks directed at today’s businesses and consumers. From fake jobs to fake texts, there’s no end to the unique and creative ways in which fraudsters are infiltrating the economy.
According to Experian’s 2023 Future of Fraud Forecast, there is an expected uptick in fraud during the upcoming year’s economic uncertainty. In order to counter these fraudulent attacks, businesses and the public can raise awareness of fraud tactics by familiarizing themselves with Experian’s top five fraud predictions for 2023:
1. Fake texts from your employer
A rise in remote work during recent years is predicted to lead to an increase in employer-related text fraud. The most prevalent of these fraudulent schemes comes in the form of a text impersonating an individual’s boss. The boss asks the employee to purchase gift cards for a phony reason, and then requests that the gift card numbers and codes are forwarded to them directly. Fraudsters use the gift cards, and the employee and/or company are left with the expense.
2. Fake job postings & mule schemes
Amid economic uncertainty, Experian predicts that fraudsters will be led to create fake remote job postings. The purpose of these job postings is convincing applicants to provide personal information during the application process, such as their date of birth and Social Security number. Once the legitimate application for the fake job posting is completed, the fraudster has enough information to perform identity theft.
Similarly, individuals might fall prey to mule schemes by accepting seemingly harmless remote job positions. These job postings are ultimately a front for moving fraudsters’ money through personal bank accounts, or even re-shipping stolen goods.
3. Frankenstein shoppers instigate retail trouble
Synthetic identity fraud occurs when a fraudster uses both real and false information to create a synthetic identity, also known as a “Frankenstein” identity. Using this new identity, the fraudster opens up new lines of credit, typically maxing out their credit limit without ever paying it back.
Experian predicts that a new, evolved version of synthetic identity fraud could spell trouble for online retailers. Fraudsters use their synthetic identities, as well as stolen card information, to create convincing online shopper profiles, resulting in significant losses for retailers who fall prey to this fraud.
4. Social media shopping fraud
Experian is predicting that in-app social commerce fraud could lead to millions of dollars worth of losses in the coming year. With limited fraud detection controls in place and little-to-no identity verification required, social commerce becomes an easy target for the placement of fraudulent purchases.
5. Peer-to-peer payment issues
Peer-to-peer payments are a convenient and user-friendly way to send and receive money with little hassle; unfortunately, fraudsters also want to take advantage of the irreversible and instant nature of these peer-to-peer payment methods. Fraudsters are predicted to gain unauthorized access to peer-to-peer payments using social engineering techniques, luring consumers into purchasing fake items or giving up their account information. Once the money is sent, there are few ways to regain the losses, leading to a convenient and quick win for the fraudsters.
Taking a look back in a time, 2022 Future of Fraud Forecast pinpointed these five threats:
1. Buy now, pay later lenders experiencing an increase in identity theft and synthetic identity fraud.
2. Cryptocurrency scams in which fraudsters create accounts with the intent of storing and funneling stolen funds.
3. Ransomware attacks in which fraudsters steal company data and demand a large ransom in exchange for returning control to the company.
4. Online romance scams stemming from fake dating app profiles which fraudsters use to ask people for money or “loans”.
5. Digital elder abuse in which fraudsters target digital newcomers through social engineering scams and account takeovers.