New account fraud has more than doubled since 2014
New account fraud increased 27.8% worldwide YTD in 2019, compared to full-year 2018 results, and more than 100% compared to 2014 levels, Jumio reveals.
Surprisingly, attempted new account fraud was 19% less during the Black Friday/Cyber Monday weekend (compared to the average 2019 fraud levels), when fraud attempts normally escalate.
Often, the first step in identity theft starts by creating a new account online. Identity theft is the deliberate use of someone else’s identity (e.g., name, address, Social Security number, bank accounts) to get money and credit and make holiday purchases. But, identity theft is also being used to perpetrate online fraud, steal property, falsify educational and other credentials, access healthcare and launder money.
“As cybercriminals perfect and fine-tune their impersonation efforts, it’s getting more difficult for modern enterprises to distinguish between high-risk from low-risk users — and this is only going to accelerate thanks to large-scale data breaches, the evolution of the dark web and the looming threat of identity theft,” said Philipp Pointner, Jumio’s chief product officer.
“All too often, companies rely on traditional methods of identity verification which are not well equipped to detect sophisticated methods of new account fraud.”
- New account fraud increased to 1.8% in 2019, a 106.8% increase over 2014 levels. During this year’s holiday period, new account fraud dipped to 1.5% which was still more than 80% higher than 2014 holiday levels.
- The Asia-Pacific region experienced the highest rates of full-year fraud at 3.27% while the U.S. had the lowest rates of fraud at 0.88% — a trend which has been pretty consistent over the last six years. While the U.S. experienced lower holiday fraud rates in 2019, new account fraud was still 138% higher in 2019 compared to 2014 levels.
- Fraud levels in emerging markets, while varied, were significantly higher than developed markets.
- The cryptocurrency and online gaming/gambling industries experienced higher-than-average fraud levels while the sharing economy and travel and entertainment industries experienced minimal fraud levels (i.e., less than 0.6%).