ID fraud surges during pandemic as more people turn to crime

Over the past year the average identity document (ID) fraud rate has increased by 41 percent over the previous year and first-time fraudsters appear to be more prevalent.

A new report from identity verification and authentication provider Onfido shows activity peaked in July and August. But with large parts of Europe encountering a 'second wave' and re-entering lockdown, coupled with the spike in online activity for the holiday shopping season, Onfido predicts fraud rates will start to climb again as the year closes.

What's interesting is that the proportion of unsophisticated fraud grew 23 percent year-over-year, from 57 percent in 2019's report to 70 percent. Given that the amount of sophisticated attacks stayed the same, at under one percent, this suggests that first-time fraudsters might be trying unsophisticated attacks as a new side hustle outside of their regular work in an effort to shield them from the economic downturn.

There are also emerging trends in biometric fraud. Onfido has identified a growing use of 2D and even 3D masks to attack selfie and video verification products. More troubling still, there has been an increase in replay attacks, where fraudsters attempt to circumvent cameras entirely and upload stolen videos or deep fakes. This was the first year Onfido has seen deep fakes used, a tactic likely to quickly grow in popularity as they are cheaper to create than good 3D masks.

The situation is complicated by the fact that many legitimate individuals' purchasing habits have dramatically changed as a result of the pandemic, making suspicious behavior harder to spot. With so much volatility in the market, businesses across all industries need to be extra-vigilant in balancing fraud risk and customer experience.

"There is no question that Covid-19 has catalyzed massive growth in identity fraud attempts, with industries like financial services disproportionately affected," says Michael Van Gestel, head of global document fraud at Onfido. "And with sensitive and personally identifiable information easily gleaned from social media and available for sale on the dark web, database checks are just not fit for purpose in this escalated fraud environment. Baking in more sophisticated identity verification methods, such as document and biometric authentication, will ensure that no matter how fraudsters try to capitalize on the changing situation, businesses can significantly lower the risk of fraud to their organization and customers."

The full report is available from the Onfido site.

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