Payment Security 101
Learn about payment fraud and how to prevent it
The unfortunate side of technological innovation is the ease of obtaining personal information in the age of Internet connectivity. In some ways, it’s harder than ever to ensure that private data remains private in this day and age. Identity theft and cybercrime of all sorts are to blame for the theft of billions of dollars each year and most instances go unsolved.
Increasingly sophisticated criminal attacks have advanced each year, creating many forms of identity theft such as phishing, malicious emails, malware, document theft, credit card fraud, and more. This data proves that criminals will use innovative methods to steal your identity for monetary gain and either use it themselves or resell it on the dark web.
Read through the identity theft statistics, which show that crime is steadily growing and cover the many methods used, what can happen to you, and the typical motive of an attacker.
It’s estimated that around one in 15 people become victims of identity theft. People around the world steal identities in various ways, whether it’s through their financial records, documents, the internet, or just by attacking.
The FTC states that the number of fraud reports is continuously growing and is an alarming number of 3,200,329 for the year. Every single individual and business can become a victim of identity theft, making it an even greater issue.
Federal Trade Commission officials have observed a spike in the rate of ID theft that’s twice as high as it was during the COVID-19 pandemic. Most of the incidents focused on targeting government relief funds that were reserved for those who were most heavily impacted by the pandemic.
According to the Australian Institute of Criminology, identity crime has increased over the last few years, leading to stolen identities and financial losses. A victim of identity crime can be one person, a business, or a government agency. This crime usually takes place with the misuse of someone’s personal identity.
More than 20% of those who submitted complaints to the Federal Trade Commission (FTC) and were victims of identity theft were 60 years or older. This is a larger percentage than any other age group. Older adults are more likely to become fraud victims as a result of freely providing data such as their name, address, date of birth, etc.
Thanks to COVID-19, cybercriminals have had an unprecedented advantage on identity theft. They are good at manipulating people emotionally, for example by calling or emailing them with a sense of urgency or pretending to be law enforcement. Criminals have a list of people who they attack as well as past victims.
30 to 39-year-olds were frequently targeted in 2020 due to having benefits that could provide financial benefits to scammers. This group of people were also identified as “responsible” adults during the pandemic crisis which is why they were provided with benefits.
Personal fraud is a type of fraud in which someone steals someone else’s credit card information or bank account information for financial gain. Other types of personal fraud include card fraud, identity theft, phishing and scams.
Roughly half of Australians have received a fraudulent call or text message since the beginning of the pandemic. These callers or texters usually impersonate the ATO or Australian government in order to steal your personal details like bank information, name, and address.
It’s costly to businesses and individuals alike. Some losses include reputation costs and financial losses, and the victim will have a harder time retrieving their stolen attack. One of the precautions that businesses can take is to avoid clicking suspicious email links, to callers confirm identities, and verify the identity.
According to the ID report, 14.5 million United States adults fall victim to identity fraud which includes $2 billion in consumer loss. There are a few ways how cybercriminals become successful in identity fraud such as through phone calls, email, mail & text messages.
Credit card fraud and scams are much more common these days. Cybercriminals often resort to using identity theft to steal bank details and perpetrate illegal activities. Sadly, not all funds are recoverable if credit card fraud is suspected.
Credit card fraud may not discriminate, but generally, the people who are most commonly targeted are the ones who have a lot of money saved in their bank accounts. This means businesses, entities, or individuals who have access to their accounts and a lot of perks are hit hard the most. The vast majority of attackers use credit card fraud for financial gain.
There are many ways attackers can gain access to your credit card information. One approach is to simply access your card information through the internet, by tricking you with phishing, fraudulent emails, or malware. These days, information is easier to find online, with things like addresses, bank accounts, and full names.
More so than other sectors, banking and financial services are hit the hardest by identity theft. This poses threats to their customers and costs millions of dollars. As if that wasn’t enough, fraudsters have been using people’s data to gain access to more critical information and functions like government documents, social media information, and more.
As criminals refine their methods and schemes to prey on people who spend more time online, cyber payment scams are on the rise. This trend has proven true among Australians, as well as in the United States. The 2021 fraud report claims that many Australians fall victim to card fraud.
Preventative measures should always be taken with regard to credit card fraud. The most effective way to avoid being a victim is to review your monthly bank statements, always monitor transactions and make sure all payments are too familiar with account information.
Counterfeit or skimming fraud is when someone skimmed from a card’s magnetic stripe, which leads to data on the card’s magnetic stripe being copied. ATM, point-of-sale terminal, or a standalone skimming device, and used to create a counterfeit card. Criminals can use counterfeit cards to purchase goods or withdraw cash.
Scammers don’t need your credit card anymore in order to commit card fraud. There are other methods such as CNP fraud, counterfeit/skimming fraud, lost/stolen card fraud, CNA fraud, and false application fraud. As these strategies progress, more money is being stolen each year.
All it takes to be a cybercriminal is a computer and an internet connection, which has led to many, many people falling victim to credit card fraud. In fact, government agencies will be less likely to catch cyber criminals if they commit crimes in another country.
When identity theft happens, your finances and job prospects aren’t the only things at risk. An ID thief might also misuse your identity for other crimes, like unlawful access to property or misusing your employment details to access certain information.
Individuals who commit employment identity theft can apply for jobs in your name, gaining access to your tax refunds and even claiming social security benefits under your name. Businesses in the United States are now adopting specific security measures, such as limiting access to personnel files and using alternative numbers beside the social security number.
Criminals now realise that regular access to human resources computer systems and manual files allows them to access all the necessary information needed to commit a fraudulent credit application. In other words, criminals steal information from other people’s files and databases to use for fraudulent credit applications.
Tax identity theft can be difficult to detect especially for Americans who can become a victim of tax fraud and may be accused of tax fraud all at the same time. This happens when someone steals a person’s social security number and applies for work with the same stolen number.
There are lots of impersonating websites that can provide fraudulent Tax File Numbers and Australian Business Number registrations. Make sure to exercise precaution when disclosing any personal information.
There’s been a rise in people being tricked by fake ATO websites and other fake government entities with more and more of us becoming victims to these scams. Scammers don’t just set up fake websites but they can also send you fake emails or text messages that seem to be from the ATO or MyGov. To avoid scams, don’t ever click on links or provide personal information without first verifying the source.
Inspector general Russell George states “the IRS must continually adapt its detection and prevention processes to reject fraudulent electronically filed tax returns and prevent fraudulent paper tax returns from posting”.
The Federal Trade Commission indicates that scams using the method of identity theft to incriminate individuals through tax-related and employment fraud have been increasing. In response, it is important for people to be more cognizant of the new cyber security threats that are present and learn how to manage digital assets to minimise exposure.
People in Australia are being urged to watch out for impersonating government phone scams. In these scams, people receive robocalls from fake government departments such as the ATO or Department of Home Affairs. Scammers use fear tactics to scare people into giving money by telling them they will be arrested if they refuse and in some cases, this works.
The government will never try to make you divulge sensitive information. According to ACCC Deputy Chair Delia Rickard, “Don’t be pressured by a threatening caller and take your time to consider who you might be dealing with”. Always confirm and verify the identities of any entity before handing over personal data.
In 2021, the ACCC reported large reports of impersonation scams by the Australian Federal Police. Unfortunately, people have been manipulated and tricked into giving Medicare and banking information. One example is an elderly who reported that she deposited more than $16,000 AUD into a scam account.
The Department of Home Affairs is the Australian Government interior ministry with responsibilities for national security, which has been impersonated by cybercriminals in 2016 costing Aussies over $99,000. The second most common types of government ID fraud are fake government threats & phishing.
Alongside reports of scams involving the ATO, there are also impersonation reports of MyGov. Occasionally, MyGov sends emails to people in regards to notification messages. However, scammers take advantage by creating the same type of email that includes a malicious link requesting bank details, Medicare numbers and personal info.
Identity fraud is a risk for Australian residents, as well as for people with false identities. This can lead to criminals opening credit cards, taking out loans, or opening unauthorised bank accounts.
Cybercriminals use personal information to launch attacks against others who share the same information or sell it on the dark web. The dark web is a place for illegal activity and for selling the identity of others. A typical passport forgery can cost anywhere upward of $3,000 USD.
While this young man was only 24 years old, he was part of a larger group with the intention of illegally forging documents to steal people’s money. One day, he managed to collect $300,000 AUD. Considering how closely this ring of identity thieves was working together, they were churning out thousands of fake driver’s licences to fraudulently obtain loans and credit cards.
According to the FTC report, it’s easy for a person’s identity to be stolen by someone with malicious intent or a company that engages in unethical or immoral practices. Also, businesses that experience data breaches can often fail to protect their personal information leaving people compromised to identity theft.
Over the last year, statistics about identity theft suggest scams involving government benefits received or applied for have increased by a staggering 2,920%. Roughly $1.2 billion of the reported losses last year are from such imposter scams according to the FTC. This disturbing trend is likely due to the trillions of dollars allocated for COVID-19 relief.
The New South Wales Government is setting up new regulations to minimise the repercussions of identity theft. The ID Support NSW service helps victims of crime recover personal information and government documents that may have been taken. Seniors now have more of a fighting chance to recover documents from identity fraud.
Identity theft is the crime of illegally stealing the personal and financial information of another person with the intent of assuming the victim’s identity. Identity fraud is the illegal use of that stolen information.
Identity theft occurs from many things like breaches of security, malware, hacking, and phishing. There is an abundance of information on the internet and information is generally free, so your identity can be stolen.
Anyone can be a victim of identity theft from entities in the business, individuals, and the government. Nonetheless, in reports, the elderly are more likely to be targeted by attackers, as they are also more likely to have more beneficial information for these attackers.
Not many businesses are fortunate enough to recover financially from identity theft; some are never able to recover at all. There are steps we can take to protect ourselves from fraudsters, such as monitoring our credit card and bank statements, verifying communications, and making sure we use the correct website addresses.
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