Identity theft up by 337% in 2020, fraud summit hears
Fraudsters are good at impersonating consumers and representatives of the financial institutions that consumers belong. Impersonation fraud increased by 337% in 2020, indicating that the pandemic did not just change the lives of consumers in many ways, but also created new opportunities for fraudsters. This is especially concerning as a third wave of Covid-19 is looming, with the President Cyril Ramaphosa promising harder lockdown measures if the spike is as severe as the second wave.
More lockdown measures will accelerate consumers’ reliance on online shopping as they prioritise their health and safety, creating more opportunities for fraud, as was highlighted by the Southern African Fraud Prevention Service (SAFPS) at the Insurance Crime Bureau International Fraud Summit on Wednesday.
“We are reaching a critical point when it comes to the economy and the extreme measures that criminals will use to perpetrate fraud,” says Manie van Schalkwyk, chief executive officer (CEO) of SAFPS.
According to the SAFPS’ 2020 statistics, there were significant increases in key areas, such as fraud listings that increased by 62%, victim listings increasing by 54% and impersonation fraud by 337%.
Impersonation fraud
Impersonation fraud happens when a criminal impersonates you by stealing your identity and then opening accounts in your name.
The credit provider will ask questions normally asked to the account holder, but due to data breaches, this information is available to the fraudster making it easier to take over your account.
The fraudster then takes over the account and leaves you with a massive amount of debt. As technology has improved significantly, it has made it easier to make a fake application look legitimate.
Biometrics
The increase in impersonation fraud has highlighted the importance of biometrics and the role that it will play in the future fight against fraud.
“We have to use the unique attributes of an individual to verify that they are who they claim to be. Therefore, Secure Citizen uses multi-modal biometrics to close the gap between corporates and consumers, leaving no place for fraud,” Dalene Deale, executive head of Secure Citizen, said.
Secure Citizen enables consumers to either enrol themselves or they can be digitally enrolled via corporates into the Secure Citizen registry.
Biometrics are enrolled and verified using artificial intelligence and all future interactions are verified by the consumer, through face, voice or fingerprints.
Van Schalkwyk said in addition to voice biometrics, facial matching is important because these are important elements when it comes to building the full profile of the consumer.
Fraud by data
Fraudsters are good at impersonating consumers and representatives of the financial institutions that consumers belong to because they have access to huge amounts of data that provide the personal information needed to perpetrate this kind of fraud.
Secure Citizen and the SAFPS believe the only way to combat impersonation fraud is to beat the fraudsters at their own game. Their key services are run by huge amounts of data that is processed in real time and can provide an accurate picture of a consumer that companies can use to ensure that they are dealing with the right person.
It is also concerning that South Africans faced two major data breaches in 2020.
“The protection of personal information is becoming a major issue,” said Van Schalkwyk.
“Consumers need to know that the information that they hand over to their banks and other financial institutions will be handled in a responsible manner and that the data leaks that we experienced last year cannot be a regular occurrence.”