Fake texts from work, bogus job postings and Frankenstein shoppers are just some of the ways Experian predicts that fraudsters are going to take advantage of consumers in 2023.
Experian recently launched its annual ‘Future of Fraud Forecast’, revealing the top five anticipated fraud threats for the new year (and building upon previous inquiries). To gain an insight, Digital Journal spoke with Kathleen Peters, chief innovation officer at Experian Decision Analytics in North America.
Digital Journal: Experian recently launched its 2023 future of fraud forecast. Can you explain some more about this year’s fraud predictions?
Kathleen Peters: This year’s predictions reflect that year-after-year fraudsters continue to be creative, and they are studying our behaviors to find new ways to target consumers and businesses. They are taking advantage of the rapid, massive shift to digital that has occurred over the last few years and adapting their attacks. The digital ecosystem is here to stay and consumers have embraced online experiences whether they are shopping, communicating, or applying for jobs. Unfortunately, this also opens many new avenues for fraudsters to exploit. From employment scams to increased challenges for retailers, the forecast predicts that criminals will use common channels such as text messages, job boards and social media to commit fraud.
DJ: You mentioned employment scams. Can you expand on what those are?
Peters: The prevalence of remote work has inspired criminals to find new avenues to defraud businesses and consumers through employment scams. One example is fake texts from the “boss,” where a fraudster pretends to be the employee’s boss and texts them to purchase gift cards. The “boss” then asks them to text the gift card numbers and codes back to them. Fraudsters like gift cards because they operate just like cash – widely available, instantly redeemable, and not very traceable. Whether the employee has used personal funds or a corporate card to purchase the gift cards, they become a victim of the scam and those funds are lost.
Meanwhile, fake job postings threaten consumers looking for work. In this scam, fraudsters will post remote job listings that are designed to lure consumers into applying. The job seekers will be prompted to provide personal details such as their social security number and date of birth on a fake job application, enabling the fraudster to commit identity theft.
Experian also predicts that consumers will face an increase in mule recruiting schemes during their job search. In this scenario, people sign up for work from home jobs and unintentionally act as re-shippers of stolen goods or help move money through their personal bank accounts on behalf of fraudsters.
DJ: How else is the digital ecosystem contributing to fraud threats?
Peters: Social media use is a constant presence in our daily lives and provides fertile ground for fraudsters. Social media platforms are becoming increasingly popular places not just to communicate and consume content, but also for making retail purchases. In fact, we predict in-app social commerce fraud could grow as brands race to make social media channels a part of their commercial growth strategy. With few identity verification and fraud detection controls in place, retailers and brands that sell on these platforms are at risk for increased fraudulent purchases.
Synthetic identity fraud will also become a larger problem for retailers as fraudsters use synthetic or “Frankenstein” identities comprised of real and false information to open a shopper profile with a retailer, eventually adding stolen payment cards to the account and making fraudulent purchases with credit that they will never pay back.
Peer-to-peer payments platforms have also grown in popularity as consumers use them to purchase items, send money to their friends and even pay their rent. The convenience is what makes these platforms popular, but consumers will need to be extra vigilant because peer-to-peer systems can provide fraudsters with an instant and irreversible way to access money.
DJ: What do businesses need to know to protect themselves from fraud?
Peters: Fraud can be complicated, and our predictions show that both businesses and consumers need to be vigilant in 2023 as fraudsters become savvier. First, businesses should consider working with a trusted partner who can assess current processes and controls and help make plans to mitigate future fraud attacks. There are new technologies and data sources that can assist in the proper verification of identities and fraud detection to alleviate the impact that these new scams could have on their portfolios in 2023 and beyond.
Second, businesses should educate employees about new types of fraud. Employees are a company’s first line of defense, and it’s important to increase awareness of these emerging types of scams.
Finally, instead of broad, generalized risk mitigation approaches, businesses should implement more targeted, innovative fraud detection and identity strategies to keep up with the dynamic pace of fraud. A multi-layered approach to fraud prevention can help businesses identify and treat a variety of fraud threats and create a system that can adapt to different fraud schemes as they evolve.
DJ: Are there steps consumers can take to stay safe from fraud threats?
Peters: Consumers must take a proactive approach in protecting themselves from fraud. Knowing the type of methods criminals use to target consumers, such as spam calls and texts, can decrease the chances of becoming a victim of this type of fraud. Consumers should be wary of any unsolicited requests for sharing personal information and always check the source of any communications they receive. Whether it is a text message, email, phone call or other notification, they should always ensure that the sender is legitimate and avoid clicking on any suspicious links if they are unsure. If a consumer receives a phone call asking for personal information, they should hang up and call the alleged company back on their official phone line.
I also recommend that consumers monitor their accounts regularly to check for any irregularities or suspicious activity. This applies to checking their credit report regularly as well, which can help consumers spot fraudulent activity associated with identity theft.
