A recent study by Pindrop analyzed various fraud methods. The Voice Intelligence & Security Report analyzed five billion calls and three million fraud catches within financial institutions, insurers and retailers.

The report focused on the rise and adoption of artificial intelligence, an impending recession and the return of pre-pandemic fraud techniques and how they're driving record rates of fraud attacks for consumers and enterprises alike. Key findings in the report include:

• States that imposed restrictions on the use of biometrics are twice as likely to experience fraud.
• In times of financial uncertainty, fraud increases. Financial institutions experienced a 53% year over year increase in fraudulent activity in Q4 2022.
• With data breaches reaching record levels, fraudsters are leveraging data from the dark web and testing it in the IVR to identify high-value accounts and attacking those accounts jointly with other fraudsters.
• Retail has emerged as one of the most fraud-dense verticals: one in every 347 calls is fraudulent within call centers supporting online retailers.

The report found that fraud rates in states that pose enhanced restrictions on the use of biometrics (such as California, Texas and Illinois) are twice as likely to experience fraud. These states also contribute to 33% of all fraud losses reported in the U.S. According to the report, one in every 784 call center interactions within the financial sector were fraudulent in Q4 2022 – a 53% increase from 2021. Additionally, fraud rates in credit unions increased by more than 70% in 2022.

Data compromises are at an all time high with more than 1,800 events reported in 2021 and 2022 individually. A combination of the rise of artificial intelligence, the digital economy and the dark web have ushered in an era of large-scale data breaches, where fraudsters are easily obtaining SSNs, birth dates, addresses, email addresses, credit card details and phone numbers as well as medical records and bank details.

Fraudsters are now deploying large-scale vishing and smishing efforts, victim social engineering, and IVR reconnaissance resulting in companies losing billions of dollars and consumer trust. Since 2020, an average of 300 million victims have been affected by these data breaches. According to report data, telecom carriers who have been previously impacted by data breaches experience a 274% higher fraud rate compared to other carriers.

While fraud is most notorious in sectors like banking and insurance, the report found that retail is the most fraud-dense vertical. Fraudsters are attacking retailers through all channels: contact centers, ecommerce, and through credit card fraud. Recent data found that 3.6% of all ecommerce revenue in 2022 has been stolen by fraudsters, and payment fraud grew 40% from 2021 to 2022. At the contact center level (where one in every 347 calls is fraudulent), fraudsters are turning to return or concessions abuse in order to receive refunds on purchases still in their possession.