5 Fraud Trends to Watch Out For in 2023
The year 2023 has arrived, and most businesses have already begun working to meet their yearly ambitions and goals. Fraudsters, similarly, do not have the intention to slow down.
Fraud throughout the years
Over the past few years or even decades, we saw fraudsters gradually becoming more creative. Even though payment standards are constantly evolving, scammers manage to stay on top, finding new ways to defraud consumers and businesses. The year 2023 will not be any different. Here is a list of fraud attack vectors to be mindful of in 2023.
#1 Business Email Compromise
Ever since the Covid-19 pandemic started, many businesses introduced the remote-work method into their company operations. Until this day, most companies provide their employees with the possibility to work from home, which shows that a solid part of the business is being conducted digitally. This is one of the main reasons that business email compromise fraud is rising more than ever before!
Businesses increasingly receive digital invoices from vendors. This is a perfect opportunity for scammers. They recreate a similar email, usually with minor differences, and send companies these digital pretend-invoices. Non-vigilant employees do not notice the email is illegitimate and wire-transfer the funds, which typically means they are nonrefundable.
According to the FBI, between June 2016 and December 2021 the BEC and EAC (Email Account Compromise) losses have surpassed $43 billion globally, including both actual and attempted. The figures are growing year by year, which shows that this type of fraud will be frequent in 2023.
BEC and EAC (Email Account Compromise) losses have surpassed $43 billion globally
#2 Credit/Debit Card Fraud
E-commerce has been booming in the past years. For many, e-commerce is an indistinguishable part of their lives. Some people, however, are more cautious than others. A fact that fraudsters are quick to take advantage of.
For many internet users, it is very hard to notice when a website is a scam. They then purchase fictional products via these websites, in this way giving away their credit/debit card details to fraudsters. The fraudsters, in turn, use the credit/debit card details to buy real products. This type of fraud has been rapidly rising in the past years and 2023 will not be an exemption.
Recommended Reading: Holiday Season fraud threat monitor
#3 Telephone Fraud
Even though fraudsters are becoming more creative and finding new ways to trick people, the old ways of scamming are not forgotten. In 2022, nearly 3 in 5 Americans (58%) reported receiving more scam calls than the previous year, which shows that this type of fraud is far from being forgotten.
Telephone fraud works in simple yet effective ways. Scammers use their creativity, for example, introduce themselves as a bank employee and ask people to provide their bank details to confirm the identity check. Unknowingly, consumers give away their bank details, only to later realize they got scammed. By then, there’s not much they can do about it. According to recent statistics, telephone fraud is still on the rise, meaning that it will also be present in 2023.
In 2022, nearly 3 in 5 Americans (58%) reported receiving more scam calls than a year ago.
#4 Cryptocurrencies’ Fraud
As soon as digital currencies appeared, fraudsters saw the opportunities. The popularity, often times irreversible transactions, and difficult identification have been the most important features, which led to this industry’s popularity among fraudsters. Despite its many benefits, it is no secret that decentralized money is often involved in criminal activities.
There is a clear correlation between the popularity of cryptocurrencies and fraud frequency, meaning that when digital money is in the bear market, there are fewer fraud attempts and vice versa. In 2022, crypto has mostly been in a bear market, therefore, the number of fraud attempts has decreased slightly. What will happen in 2023 is still unclear, however, crypto fraud will remain there, only the extent of it will vary depending on the market conditions.
In the event of cryptocurrencies’ popularity rising, there are always new entrants, who lack experience and are seen as easy prey for fraudsters. That is why consumers should watch out for fraud attempts at all times.
#5 Synthetic Identity Fraud
Artificial intelligence and other related technologies have been improving from the outset. It has now reached the point, where fraudsters are capable of using technologies to pretend to be anyone they want to be. Over the past years, the use of artificial intelligence to synthesize identity and use it for fraud purposes has been increasing. As a matter of fact, the tools to synthesize identities are available for free or €3 at most, which only exaggerates the desire to try scamming.
The value of the fraud, committed using technology to synthesize identity, is expected to reach $5 billion by 2024, which ultimately shows that this type of fraud is getting more popular by the day, and it will not stop anytime soon. The projections suggest that fraud by using fabricated identities will become even more prevalent in 2023, which is why both consumers and businesses should remain alert and cautious.
The value of the fraud, committed using technology to synthesize identity, is expected to reach $5 billion by 2024…
What can businesses do to protect themselves?
With fraud predicted to be even more intense in 2023, most businesses are now vulnerable to incurring significant harm. All the trends show that scammers are improving and coming up with better ways to trick people day by day. Companies that recognize the danger now can always look for external help, to ensure the company’s safety.
Products like Protectmaxx were introduced to battle fraudsters in the best ways possible. Protectmaxx is supported through continuous product development and research, guaranteeing 100% protection, no matter how hard fraudsters may try. In the unlikely case of fraudsters being successful to bypass security, most providers are covering all the damages. Do you think fraud protection software might be something your business would benefit from? Contact us and find out more about the leading fraud protection API!
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