British Financial Fraud Surges 28%
New account fraud surged by 28% year-on-year in the UK as global rates fell by nearly the same amount, according to new data from the ID verification experts at Jumio. They analysed tens of millions of worldwide financial transactions to compile its yearly Fraud Report, which reveals that, whilst the worldwide normal for new account fraud fees dropped 23% year-on-calendar year, in Britain it has actually increased by more than 25%.
The UK has the second highest level of financial fraud in Europe. immediately after Spain, which also recorded a 25% raise in ID-based fraud in 2020.
Jumio's report looked at both ID-based fraud and selfie fraud, where the user attempted to use a picture or video instead of a genuine selfie to corroborate their digital identity. Selfie-based fraud rates were five times higher than ID-based fraud. This illustrates the growing number of stolen ID documents available on the dark web for purchase and, more importantly, the growing need to determine if an ID is authentic and belongs to the user creating a new account online. The report recorded attempts to bypass fraud checks using both government-issued IDs and selfies.
Fraud rates in the UK based on ID documents almost doubled from 2017 levels, and fraud levels in November were a third higher than those from January to October in 2020, it revealed.
Jumio say that the relatively high rates of fraud in the UK could be attributed to the large number of financial services customers based there.
The industry is by far the most affected by fraud of any surveyed globally, although it did manage to record a drop-in rates from 2019. However, in the UK it was the online gaming and crypto-currency verticals that had the highest levels of new account fraud during the year; an indication of ongoing money laundering activity, Jumio claimed.
Interestingly, the global drop in new account fraud came during a year in which many experts have been claiming fraud rates have risen. “One possible explanation is that more legitimate customers were opening accounts through online channels instead of in person, so the percentage of bad actors in the total transactions we processed dropped as a result,” the report says.
Another possibility is that fraudsters redirected their efforts to easier targets where security was more lax and they did not have to divulge personal information about themselves, such as providing a selfie, which is self-incriminating.
Jumio say that by incorporating selfie-based authentication to US federal government ID uploads, organisations have the best probability of weeding out scammers. It claimed to have viewed 80% considerably less fraud making use of this process when compared to clients who only have to have a government-issued ID.
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