Identity fraud jumps over 40% during the pandemic

Onfido, the global identity verification and authentication provider, says the risk of identity fraud has “increased significantly” with attacks occurring more frequently since the start of the pandemic.

Over the past 12 months, according to Onfido's Identity Fraud Report 2020, the identity document (ID) fraud rate increased by 41 per cent over the previous year, as first-time fraudsters “appear to be more prevalent”.

This was “likely due to increased economic hardships during the pandemic”, said Onfido. The average monthly ID fraud rate reached 5.8 per cent - up from 4.1 per cent the previous year.

The increase, said Onfido, is largely reflective of the significant spike in fraud since April 2020 when most of the world was entering the first phase of lockdown, as rates remained stable during the first few months of the year.

Fraudulent activity peaked in July and August. But with large parts of Europe potentially encountering a “second wave” and re-entering lockdown, coupled with the spike in online activity for the holiday shopping season, Onfido predicts fraud rates will start to climb again in the last few months of the year.

This year - up to October - the proportion of “unsophisticated fraud” grew 23 per cent annually.

Given that the amount of sophisticated attacks stayed the same - at under one per cent - this suggests that first-time fraudsters might be trying unsophisticated attacks as a new “side hustle” outside of their regular work to “shield them from the economic downturn”, said Onfido.

Michael Van Gestel, head of global document fraud at Onfido, said: “There is no question that COVID-19 has catalysed massive growth in identity fraud attempts, with industries like financial services disproportionately affected.

“And with sensitive and personally identifiable information easily gleaned from social media and available for sale on the dark web, database checks are just not fit for purpose in this escalated fraud environment.”

He added: “Baking in more sophisticated identity verification methods such as biometric authentication will ensure that businesses can significantly lower the risk of fraud to their organisation and customers.”

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