Consumers Increasingly Shoulder Burden of Sophisticated Fraud Schemes
New account fraud losses rose slightly from $3.0 billion to $3.4 billion as fraudsters look beyond classic card fraud. Losses rose for unconventional account targets such as mortgages, student loans, and car loans. Similarly, fraudsters heightened their attacks on peripheral financial accounts like loyalty and rewards programs and retirement accounts. These account types, generally considered ‘second tier’ by fraudsters, have been less prominent targets since they are difficult to monetize.
Meanwhile, fraudsters are growing even more adept at overcoming authentication challenges. Takeovers of mobile phone accounts nearly doubled, from 380,000 victims in 2017 to nearly 680,000 in 2018. These takeovers allow fraudsters to intercept alerts and one-time passwords sent by text message, one of the most prevalent forms of step-up authentication used today.
“Given the agility and tenacity demonstrated by fraudsters in 2018, financial institutions should assume that every account type will be under greater pressure going forward,” said Jim Johnson, EVP, FI Payments and Wealth, FIS. “Adequately defending customers from these new security assaults will require the development and adoption of next-generation fraud mitigation strategies.”