Identity Fraud and the Cost of Living Crisis: New Challenges for 2024

Fraud is a rampant threat to individuals and organizations worldwide and across all sectors. In order to protect against the dangers of fraud in its many forms, it is vital to stay in the loop on the latest fraud trends and the threat landscape.

The Fraudscape 2024 report from Cifas, the UK’s Fraud Prevention Community, is an effort to share this information to help prevent fraud. The report is compiled using data from Cifas’ National Fraud Database (NFD), Insider Threat Database (ITD), and intelligence from members, partners, and law enforcement agencies.

According to the report, cybercriminals are increasingly exploiting turmoil caused by economic uncertainty, the rising cost of living, and the growing popularity of remote and hybrid working, alongside other factors. This has simultaneously given cybercriminals more avenues for launching attacks and provided more people with the incentive to commit fraud. Read on to discover recent intelligence about fraud trends in 2024.

Identity Fraud

The report explores a variety of forms, vectors, and methods of fraud used by threat actors, such as identity fraud, including identity theft. Identity fraud cases have decreased by 14%, but it remains the primary type of fraud, making up 64% of filings. Bank account identity fraud increased by 12%, and personal current accounts were the most targeted.

There was a significant decrease in identity fraud via telecommunications products, down 49%, likely as a result of criminals shifting their focus regarding these products from identity fraud to facility takeover activity.

Impersonation involving a current address makes up 77% of cases. Most victims of impersonation filing cases with the NFD are over 50 years old (24% over 61, 21% 51-60). However, the 21-30 age group saw an increase of 11% in impersonation cases.

Misuse of Facility

In 2024, there was a 5% increase in misuse of facility cases reported by organizations. Loan products saw an 82% increase, followed by asset finance at 45% and plastic cards at 17%. These increases are likely due to increased payment evasion related to COVID loan schemes and theft of assets. Cases reported to the NFD with information indicative of money mule behavior showed a 6% decrease from the previous year, but they still make up 65% of cases of misused bank account filings.

Facility Takeover

Cases of facility takeover rose 13% from the previous year, due in large part to a 59% increase in telecommunications sector filings, making it now the most impacted industry for facility takeover filings. Threat actors often achieve this by launching phishing attacks to obtain access to targets’ accounts and infiltrate an organization’s systems. These cybercriminals also increasingly take steps to evade specific anti-fraud controls they know are in place.

Insider Threats

Insider threats increased by 14%, according to the ITD data, with 41 more filings than the previous year. The most common type of insider threat case was dishonest action to obtain benefit by theft or deception, accounting for 49% of cases. Member organizations have provided feedback that this increase could be due to financial pressures during the cost-of-living crisis. The second most popular case type is false employment application, making up 33% of cases, down from the previous year.

Insider threat cases detected by internal controls have increased by 20%, but still constitute a percentage similar to the previous year (56%). Of insider individuals engaged in dishonest conduct, 38% had been in their position for less than a year, along with 31% of subjects recorded for dishonest actions and 64% of those recorded for account misconduct. These statistics likely indicate an increased willingness to turn to cyberthreat activity in the early days of their employment.

False Application

Cases of false application recorded to the NFD decreased by 17%, thanks in large part to a 31% decrease in false application cases in the bank account sector. In contrast with the overall decrease, other sectors saw increases in false application cases, including loans (up 25%), insurance (up 20%), and telecommunications (up 17%).

False documents remain the predominant reason for these filings despite a 35% decrease. This decrease is especially evident in bank accounts, which saw a 50% decline in cases. Falsifying proof of no claims more than doubled since the previous year, going from 4% to 9% of cases. False bank statements account for the greatest portion of filed documents at 31%, followed by utility bills at 28%.

Conclusion

The impact of fraud on individuals and businesses alike is increasing year over year, and it is crucial for organizations to take steps to protect against fraud. The report recommends implementing measures in five key areas.

• Provide cross-government leadership to organizations and individuals to fight and respond to fraud through initiatives, including the creation of a Minister for Economic Crime.
• Improve the response to fraud from authorities with a fraud policing budget and better use of the public sector for crime reduction functions.
• Increase support for fraud victims, such as business victims and victims of identity fraud.
• Modernize the response to fraud in the criminal justice sector, including by evaluating and reviewing laws on identity theft.
• Ensure that online platforms such as social media are a part of the response to fraud across sectors, including by establishing an Online Safety Act Code of Conduct.

It is crucial for organizations and individuals to take steps to protect against fraud in the short term as well as launching initiatives to address the problem of fraud on a systemic level. With these tips and knowledge on the latest fraud threat trends, the risks of fraud across all sectors and for individual targets can be significantly mitigated.

Editor’s Note: The opinions expressed in this guest author article are solely those of the contributor and do not necessarily reflect those of Tripwire.