Experian Sheds Light on the Changing Fraud Landscape

Fraud has the potential to impact pretty much all businesses and consumers, stripping victims of their identity, finances and, often, their dignity. 

It’s a landscape becoming increasingly difficult to navigate as fraudsters deploy more sophisticated methods, harnessing the very latest emerging technologies such as generative AI (Gen AI) to carry out their illicit activities. 

An Experian report published last year found almost 70% of businesses say fraud losses have increased in recent years, while more than half of consumers felt they were more of a fraud target compared to a year prior.

In a bid to highlight the dangers facing organisations in financial services and beyond, not to mention their customers, Experian has published its 2024 Future of Fraud Forecast, which identifies five fraud threats to be cautious of this year. 

“The speed and complexity of fraud attacks due to new technology and sophisticated fraudsters is leaving both businesses and consumers at risk in 2024,” comments Kathleen Peters, Chief Innovation Officer at Experian Decision Analytics.

“Now more than ever, businesses need to implement a multilayered approach to their identity verification and fraud prevention strategies that leverages the latest technology available.”

Future of fraud

As bad actors utilise the power of data and technology, Experian contends businesses must do the same when it comes to their fraud protection solutions in order to mitigate risk and protect consumers.

The information services giant outlines five fraud threats and trends to look out for in 2024:

• Gen AI accelerates DIY fraud: The explosive popularity of Gen AI has brought many benefits, Experian says, but has also made fraud more accessible. The firm says fraudsters will use Gen AI to accelerate DIY fraud with a wide range of deepfake content, such as emails, voice and video, and code creation, to set up scam websites and perpetuate online attacks. Fraudsters may also use the technology to socially engineer ‘proof of life’ schemes. What’s more, using stolen identities, fraudsters will leverage Gen AI to create fake profiles on social media, allowing them to interact online. Experian’s take is that companies must utilise multilayered fraud prevention solutions that fight AI with AI.
• Branches are back: Despite a substantial migration to digital lending experiences, many consumers are heading to physical bank branches to open new accounts or get financial advice. This is happening because they want to feel safer and think they are avoiding online security risks. Experian previously found 85% of consumers report physical biometrics as the most trusted and secure authentication method, but the measure is only used by 32% of businesses to detect and protect against fraud. Now, it forecasts that lenders will introduce more digital ID verification steps, such as physical biometrics, at branches for in-person account openings.
• Retailers hit by empty returns: The prevalence of online shopping has led to fraudsters finding creative ways to scam some retailers and small businesses. One such example is a customer saying they’re returning a purchased item, only for the business to receive an empty box. Experian predicts more criminals will use this method in 2024, claiming returns must have been lost in the mail. 
• Synthetic identity fraud to surge: Many fraudsters created synthetic identities during the pandemic, before finding easier methods to steal funds. Despite these identities laying dormant, Experian predicts they will be used to “bust out” and steal funds over the next 12 months as they can more easily elude detection. Businesses must therefore collaborate more closely than ever with fraud prevention partners to review their current portfolios for synthetic identity accounts.
• Cause-related deception: From fake fundraising campaigns and social media giveaways to investment opportunities and text fraud, Experian says fraudsters are employing new methods that strike an emotional response from consumers, with cause-related requests or too-good-to-be-true offers used to gain access to personal information. Consumes must take extreme caution as these methods surge in 2024.

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