By Roy Urrico
Finopotamus aims to highlight white papers, surveys, analyses and reports that provide a glimpse as to what is taking place and/or impacting credit unions and other organizations in the financial services industry.
A new report, Protecting What Matters Most: Key Learnings & Tips to Protect Your Digital Safety & Security, from Boston-based intelligent identity security company Sontiq, with input from the Identity Theft Resource Center (ITRC), suggests all stakeholders have a role in reducing the effectiveness of threat actors who leverage identities to commit fraud.
“Protecting yourself, your friends, family, and your workplace from identity crimes and compromises has become increasingly difficult,” said Eva Velasquez, president/CEO at the ITRC in the report’s introduction. “Fraudsters continue to exploit the health crisis, creating a ‘scamdemic.’ Identity thieves defraud our government systems to the tune of billions of dollars using the compromised identity credentials of unknowing victims. And, after several years of a downward trend, data breaches are on track to eclipse the astronomical numbers we witnessed in 2017.”
The Future of Identity Risk
Finopotamus took a deeper dive into a section of the report that predicts fraud trends for 2022, based on observations by recognized identity security researcher Al Pascual, senior vice president, data breach solutions at Sontiq.
Pascual explained several of the tendencies not only directly affect consumers, but could ultimately impact credit unions and other financial institutions:
New Account Fraud Will Explode. Cybercriminals open new accounts using stolen identities to obtain loans, move illicit funds, and more. New fraudsters who have honed their skills on government benefits fraud (e.g., state unemployment and the Paycheck Protection Program) are in a good position to transfer their skills to other targets, like financial institutions, credit card issuers, and lenders.
Pascual explained it does not take a lot of imagination to recognize the tremendous amount of benefits fraud committed over the last year. “For a lot of credit unions, there was not as much concern about it necessarily because it was not their loss, it was the government's loss. But like every other new fraud scheme, as it perpetuates and becomes more common, the criminals who are good at it begin to train other criminals.” As a result, Pascual emphasized “a lot of fraudsters who were focused on other areas got involved in benefits fraud just because the money was flowing so freely.”
From a trend standpoint, Pascual noted benefits fraud looks a lot like account opening fraud at a credit union or bank. He explained in the last year a lot of fraudsters became trained on the same kind of methodology needed to be successful when opening new (banking) accounts. He added, “That's going to roll downhill and end up on credit unions’ collective doorsteps. If you are not already struggling with new account fraud, you will be; and if you are already struggling, it's going to get worse.”