According to the 2024 Mid-Year Identity Fraud Review by AuthenticID, digital identity fraud in 2024 continues to rise! Fraudulent transactions have increased by more than 73% year-over-year during the first half of 2024, and suspected fraudulent activities went up more than 84%. The steep incline underlines both the rise in fraud skills and the need for stiffer countermeasures. This first half report includes internal proprietary data anonymized and analyzed from AuthenticID’s platform’s identity verification, biometric authentication, and watchlist technology and processes. They also utilized data from their consumer fraud survey, which received 500 responses and was conducted in June 2024.
Going into the 2024 digital landscape, the rise in fraudulent activities is a trend that scaringly seems to be on an increase and requires urgent action. A total of 63% of financial firms reported at least an overall fraud increase of 6% in the past 12 months. The surge in fraud, specifically on digital channels, is quite a worrying issue for business and consumers alike.
Identity Crime Will Continue Setting Record Highs
Blair Cohen, founder and president of AuthenticID, says we need to take aggressive measures against this fast-rising threat. “What we have seen so far in 2024 is that identity crime will continue setting record highs in striking both businesses and consumers alike”, says Cohen. “With new, generative AI-powered fraudster tools proliferating, businesses and consumers are presented with significant challenges in breaches and business attacks.”. The same generative AI-powered tools, however, can also be used to prevent fraud. It’s upon the business to stay ahead of fraud as it continues to evolve at breakneck speed.
AI-enabled fraud is probably the most disturbing trend. Deepfakes have a lot of tactics with regard to identity fraud, such as a lot more account takeover attacks and injection attacks. These advanced methods not only promise to be more effective but also harder to detect, leading to large impacts on both fraud trends and consumer sentiment.
Recently, British engineering giant Arup was the target of a deepfake scam that led to a $25 million payout. Advanced deepfake technology tricked an employee at the multinational company into believing that an individual in a video call was the company’s chief financial officer, where multiple staff members were deepfake recreations.
Further, four in ten of the surveyed have already had their personal data exposed in a breach this year; 68% said that the threat of identity fraud influences purchasing decisions and opening accounts, generally influences business interactions.
Digital Identity Fraud 2024: Consumers Prefer Physical Documents
A report showed that ID verification fraud made up 78% of all fraudulent activities in the first half of the year. Other methods, such as headshot manipulation, fake signature strategies, and barcode text analysis, further complicate the process of verifying an identity. In addition, 91% of the survey participants could not distinguish a real person from a deep fake headshot, proving how effective these fraudulent techniques are.
Although the digital transformation is at its peak, most consumers still prefer physical documents on identity to digital ones. In the survey, 47% of consumers prefer a physical wallet, and only 19% prefer a digital wallet alone. A third—32 percent—of the respondents indicated they would use both physical and digital wallets depending on the circumstances. This suggests that while digital identity solutions are increasingly in use, physical documents remain in a place of trust among consumers.
The message is very clear: as fraudsters get smarter and use advanced technologies to perpetrate schemes, businesses must do the same to protect themselves and their customers. This war against fraud is long-term and continuous—a fight that requires eternal vigilance, innovation, and close collaboration on the part of all stakeholders in the digital ecosystem.
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