Just as your business must adapt to changing market conditions, consumer behavior, and technological innovation, it is becoming increasingly important for businesses to be quick to pivot their brand protection and digital risk protection strategies as the realm of potential threats expands.
As technology advances, so do the tactics of fraudsters, posing intricate challenges for brands of all sizes. Safeguarding your brand identity against the ever-evolving landscape of fraud trends has become an essential endeavor for any business aiming to thrive in today’s market. In this blog post, we explore the latest fraud trends, equipping you with proactive strategies to fortify your brand’s integrity, customer trust, and bottom line.
“Shielding your brand from the effects of fraud isn’t just a defensive strategy; it’s an investment in the integrity of your business. By having a digital risk protection strategy in place and being aware of the latest fraud trends out there, you can position your company to stay competitive and authentic, especially during the holiday shopping season when we see instances of fraud increase.”
– Jessica Pate, SVP of Marketing & PR, Tracer
From emerging cyber threats to deceptive social engineering techniques, being aware of these fraud trends and investing in digital risk protection and brand protection software can empower you to outsmart fraudsters and secure your brand’s future. Here are the top 6 fraud trends to know about:
- Account takeover
- Digital payment theft
- Synthetic identities
- Cryptocurrency fraud
- Social media scams
Fraud Trend #1: Account Takeover
Account takeover (ATO) fraud is one of the most pervasive and damaging threats in the realm of digital risk protection and cybersecurity. This insidious form of fraud occurs when bad actors gain unauthorized access to user accounts, wielding the power to exploit sensitive information, manipulate transactions, and generally wreak havoc.
As people increasingly entrust personal and financial information to digital platforms, and online platforms become increasingly interconnected, the compromise of a single account can serve as a domino effect, potentially leading to unauthorized access across multiple services. This has led to a surge in account takeover incidents. Brands must be vigilant and proactive to protect themselves and their customers from the threat of account takeover fraud.
Fraudsters utilize a variety of methods to gain unauthorized access to individual or business user accounts, ranging from brute-force attacks that systematically guess passwords to more sophisticated tactics like phishing scams and malware. Once they gain control, the attackers can alter account settings, make unauthorized transactions, gather personal information, and even use the compromised account as a launchpad for larger-scale cyberattacks. The consequences extend beyond financial losses; when customers are victims of account takeover attacks, they often endure reputational damage, emotional distress, and a loss of trust in the platforms they once relied upon, potentially including yours.
Fraud Trend #2: Digital Payment Theft
Digital payment methods have become more and more popular, but they come with risks. Whether it’s mobile wallets, online transactions, contactless payments, or any other methods that have been growing in popularity, bad actors are finding new ways to exploit vulnerabilities and defraud unsuspecting users.
Digital payment theft encompasses a range of deceptive tactics and malicious activities that aim to exploit vulnerabilities in online payment systems, leading to financial losses, compromised personal data, and a profound erosion of trust. Forms of this kind of fraud include credit card fraud, phishing attacks, account takeover fraud, and payment gateway fraud.
Digital payment theft can have serious consequences for your business. The most immediate and tangible impact of digital payment theft on brands is the financial toll. This includes loss of revenue due to chargebacks, refunds, fees, and penalties. There is also the arduous task of recovering lost funds and rectifying fraudulent transactions, which can strain resources and disrupt normal operations. Additionally, a breach resulting from digital payment theft can trigger legal liabilities, potential lawsuits, and regulatory fines.
While online transactions are undeniably convenient and accessible in this age of digital commerce, it can be expensive when digital payment theft occurs.
Fraud Trend #3: Synthetic Identities
Synthetic identity fraud is one of the fastest-growing types of financial crime in the United States, and is a threat that has proven difficult for traditional methods of detections to catch.
Unlike traditional identity theft, where criminals steal an individual’s personal information, synthetic identities are the creation of entirely fictitious identities, blending real and fake data to form a new persona that’s challenging to distinguish from a legitimate one.
For example, bad actors may steal a legitimate Social Security number and combine it with fake personal information, such as a fake name, date of birth, and address, to create an entirely new identity. Fraudsters then apply for small loans or credit cards with synthetic identities and begin making payments and building a credit history. As the fraudulent identity’s credit profile improves, criminals gradually gain access to higher credit limits, ultimately facilitating large-scale financial transactions. After several months or years of nurturing their synthetic identities, the fraudsters will “bust out,” or max out their available credit and disappear.
This is where brands can become caught in the crossfire. By the time the fraud is detected, significant sums may be lost, affecting a business’s bottom line and operational stability, not to mention the impact on customer trust, and regulatory and compliance challenges that follow. With the rise of synthetic shoppers, synthetic identities are a type of fraud businesses cannot afford to ignore.
Fraud Trend #4: Cryptocurrency Fraud
Cryptocurrency fraud is a type of digital payment fraud, in that it is a type of digital currency that exists only electronically. There are many different cryptocurrencies, with new ones continually being created, which means the types of cryptocurrency fraud are continually evolving. There are some major differences between cryptocurrencies and traditional currencies that increase consumer risk.
Cryptocurrency accounts are not backed or insured by a government, and payments do not come with legal protections and are typically not reversible. Because of the lack of regulation and safety precautions in place, bad actors are consistently finding new ways to scam users. There are many types of cryptocurrency fraud out there, but there are a few types that brands should specifically be aware of: business impersonator scams.
Scammers impersonate well-known companies or new or established businesses to seem credible and get in contact with real customers. One method of cryptocurrency fraud is when bad actors text, call, email, send messages on social media, or create pop up messages saying there’s an issue with the customer’s account or payment methods, and to fix it, the customer needs to buy crypto and send it to them.
Another method is to say the company is issuing their own coin or token. This fraudulent message may come in the form of social media ads, news articles or a lookalike website to trick people into buying.
Unfortunately, when people fall for these cryptocurrency fraud schemes, it can reflect negatively on your brand identity and reputation. Additionally, businesses that embrace cryptocurrencies for transactions or investments can suffer reputational damage if associated with fraudulent activities. Considering cryptocurrency fraud in your digital risk protection strategy is important.
Fraud Trend #5: Ransomware
Stories of ransomware attacks on large companies or organizations are everywhere. Individuals can also be victims of ransomware attacks on their personal devices.
This form of cyberattack uses encryption technology and extortion tactics, effectively holding digital assets hostage until a ransom is paid. With its ability to cripple systems, compromise sensitive data, and disrupt vital operations, ransomware poses significant challenges for businesses trying to safeguard their digital landscapes.
Ransomware attacks typically begin with the unwitting activation of malicious software. This can occur through email attachments, infected downloads, or compromised websites. Once executed, the ransomware encrypts the victim’s files, rendering them inaccessible.
The ways that ransomware can be activated are varied, including malicious spam, malicious advertising, spear phishing, and social engineering.
For businesses, the impact means critical systems may be shut down, bringing operations to a halt and causing massive financial losses. The reputational damage that follows can deter customers and partners, leading to prolonged recovery times.
Fraud Trend #6: Social Media Scams
Social media is a breeding ground for a diverse array of scams. Bad actors employ a variety of tactics to manipulate individuals into divulging sensitive information, clicking on malicious links, or parting with their hard-earned money. Some of these social media scams include phishing, fake giveaways, romance scams, investment scams, and impersonation.
Brands can be negatively affected by social media scams, especially when bad actors create fake profiles pretending to be that business. Fraudsters can trick users into clicking on malicious links that steal personal information or install malware. They can ask users for their personal information, or direct users from the fake social media page to fake websites, which can lead to fraudulent transactions or stolen personal information.
For businesses, social media scams can tarnish their image if impostor accounts spread false information or fraudulent activities. Moreover, successful phishing attacks can grant hackers access to sensitive corporate data, leading to data breaches and potential legal liabilities.
As the line between legitimate content and malicious content continues to blur, it’s important for companies to safeguard their brand identity against social media scams through digital risk protection and brand protection software.
How Tracer Can Help
Tracer offers digital risk protection for the next generation of brands. By using Human-in-the-Loop AI and machine learning, Tracer’s brand protection software dramatically shortens the time from fraud detection to takedown by intelligently automating the review process and automatically offering an enforcement recommendation. Our new Anti-Phishing Product is designed specifically to combat these types of fraud from negatively impacting your brand identity by removing phishing attacks faster and more accurately than ever before. If you’re looking for a brand intelligence platform to help you make better-informed business decisions and take action against fraud faster and more effectively, get in touch today.
Learn more about Tracer’s brand protection and digital risk protection offerings today.