Perfect storm: Fraud is skyrocketing coming out of pandemic | ZDNet
A financial crime monitoring platform has just announced the results of its latest financial crime report. The report from Feedzai analyzes 12B global transactions from January to March of this year in order to identify the latest fraud, banking, and consumer trends.
The top line results are … dispiriting.
Bank fraud attacks have increased 159% over the past year and phone banking fraud has seen a 728% increase. Over 90% of fraud attacks occurred online, and California, where I live, won the unwelcome distinction as the top state for fraud. Take that, New York.
The jumps follow a post-pandemic logic. Coming out of lockdown, people are starting to spend more money locally and internationally. The time covered by the report saw a 410% increase in international transactions. Transaction volumes are increasing back to pre-pandemic levels, and fraud has followed close behind. At the same time, an increased reliance on digital services during the pandemic has placed consumers more at risk for online and phone fraud, particularly among consumers who previously preferred to shop in stores and may be less digitally savvy.
“The world may have paused in 2020, but financial criminals did not,” says Jaime Ferreira, Senior Director of Global Data Science at Feedzai. “Reliance on digital forms of shopping, banking, and payments actually made it easier for fraudsters to attack more people, more quickly. As fewer consumers feel the need to walk into a bank branch or a mall we need to adapt financial services and payments to protect consumers. And as consumers, we need to continue to be vigilant and educate ourselves on how to stay safe.”
According to the report, banking is the primary channel for fraudsters, whether online, in-person, or by phone. I recently listed an item on Craigslist and was met with a barrage of scams, some obvious, some rather elegant, all directed at perpetrating some form of rip-off, including attempting to access my bank account. With many bank branches closed or operating during limited hours during the pandemic, banking has shifted primarily online and over the phone, the perfect sandboxes for cheats.
Following California, the states with the highest fraud were Florida, Washington, Arkansas, and New York. Interestingly, Android devices see 1.9 times more fraud than iOS devices, despite having only half the transaction volume of iOS. The report suggests Apple’s tighter control of apps on the App Store makes it more difficult for fraudsters to infiltrate the platform.
All of this speaks to a need for greater vigilance than ever, which may be a tough message to sell as parts of the world that believe the worst of the pandemic is behind them cast a collective sigh of relief and shake off the dust heading into summer.
The Feedzai Financial Crime Report Q2 2021 can be found in its entirety here.
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