A recent fraud survey from a UK fraud consortium sheds light on an evolving trend in criminal tactics, indicating that while traditional methods are being disrupted, criminals are swiftly adapting. They now use more sophisticated and often AI-driven tools to evade detection.
Record Number of Fraud Reports
Cifas reported a record number of fraud reports for the first half of this year through its National Fraud Database (NFD), despite a 7% decline in identity fraud cases. This drop is not indicative of a decrease in criminal activity but rather reflects changes in how criminals are operating.
Account Takeover and AI-Driven Attacks
The survey highlights that account takeover, particularly on mobile devices, has become more common. Cybercriminals are using powerful, automated tools—often powered by artificial intelligence—to carry out these attacks with greater ease and success.
Rise in First-Party Fraud
Another significant trend is the increase in first-party fraud, where legitimate customers misuse their accounts for malicious purposes. According to Cifas, there was a 35% rise in such cases. FICO’s research further supports this by indicating that nearly one-third of respondents believe it is justifiable or commonplace to falsify credit applications.
First-party fraud has become the most prevalent type globally, with many consumers viewing it as a victimless crime, driven by economic pressures like rising inflation and interest rates.
Fraud for Financial Strain
The financial strain caused by these economic factors is prompting some individuals to take extreme measures. Cifas reports that more people are selling their own identities, often in exchange for short-term financial gains. However, this can result in long-lasting damage to credit scores as fraudsters may take out loans or credit cards using the victim’s identity.
FICO warns that consumers who misrepresent themselves on credit card applications might get a temporary boost in credit but are likely to fall into deeper debt and face potential legal repercussions.