Banking Fraud up 159% as Transactions Hit Pre-Pandemic Volumes
Banking fraud attempts soared by 159% from the final three months of 2020 to Q1 2021 as scammers sought to hide their attack in legitimate online activity, according to Feedzai.
Data used in the firm’s Financial Crime Report Q2 2021 Edition includes 12 billion global transactions between January-March 2021.
The vast majority (93%) of banking fraud during the period, as always, was online. However, while telephone banking made up less than 1% of total transactions, Q1 2021 saw fraud attempts via this channel spike by a dramatic 728% from the previous quarter.
The primary tactics cyber-criminals used to defraud banks and their customers include account takeover (42%), followed by new account fraud (23%), impersonation (21%), purchase scams (15%) and phishing (7%).
Account takeover (ATO) is usually the result of a scammer getting hold of victims’ online banking log-ins, while account openings can be done with real, synthetic or a blend of the two identities. Impersonation typically involves a fraudster pretending to be a figure of authority in order to access the victim’s bank account.
Overall, card-not-present (CNP) — dominated by online and mobile channels — accounted for 83% of all fraud attempts despite making up just 18% of card transactions. Part of that may be due to the roll-out of EMV cards, which has made in-person fraud using cloned cards more difficult.
That may also be responsible for the drop in POS malware designed to harvest card data from card magstripes as they are entered by customers at restaurants and convenience stores. This was particularly prevalent in the US.
Feedzai linked the increase in fraud to a broader surge in transaction volumes globally — and especially in the US, where generous government stimulus funding has put more money in consumers’ pockets.
Transaction volumes for all regions are now greater than pre-pandemic levels, it said.
“As vaccines become more widespread, we expect the behavioral changes taking place in the US today — namely more travel and a consumer base that more closely resembles a pre-pandemic world — to be mirrored in other countries,” the report argued.
“But that also means the high levels of fraud will only continue to grow. Consumers aren’t the only ones betting on recovery. Fraudsters are too.”
Source: Infosecurity Magazine