Companies Are Unprepared to Deal with Synthetic Identity Fraud, Mobile Attacks and CCPA Compliance
IDology, a GBG company, released its Seventh Annual Fraud Report, revealing the growing impact of large-scale data breaches and fraud on consumer trust and the critical need for businesses to balance the digital consumer experience with strong identity verification processes. The report also found that senior executives believe their companies are still not prepared to combat synthetic identity fraud and mobile attacks. Additionally, the California Consumer Privacy Act (CCPA) is expected to have significant implications in 2020 and many businesses may not be ready to comply.
“Fraud is now clearly a trust issue as well as a security issue. Our annual report found that a consumer trust gap with businesses has emerged that is directly impacting customer retention and engagement. Combined with a continually shifting fraud landscape and increased government-mandated compliance, business executives have their hands full,” said John Dancu, CEO of IDology. “The good news is that companies can address this and improve customer retention by taking a strategic approach to identity verification that is effective in combatting all types of fraud, fosters a frictionless customer experience and helps drive compliance and revenue.”
With close to half of companies surveyed experiencing a loss in consumer trust, businesses have added pressure in the fight against fraud to create extra checkpoints for digitally verifying customer identities. But too many fraud prevention measures result in friction for consumers and loss of revenue. This can result in costly cart abandonment and decrease the likelihood that consumers will use features that drive repeat business, such as keeping a credit card on file. Efficient, strategic identity verification measures can boost consumer trust while minimizing friction.
The study revealed that 40% of businesses across all industries surveyed experienced an increase in synthetic identity fraud (SIF) over the last 12 months. Yet, executives report that SIF and mobile device attacks are the types of fraud they are least prepared to detect and prevent, especially since SIF is difficult to uncover with legacy systems. Ninety-two percent of executives surveyed expressed concern over SIF, with the number who reported being extremely or very worried about SIF surging by 54% year-over-year. When asked about fraud concerns over the next three years, 48% of executives predicted SIF will be the most severe form of fraud.
Fraudsters are adapting and looking for smaller scores. The IDology study found that fraud transactions under $500 have increased 50% as criminals evolve their strategies and look to fly under the radar of legacy fraud detection approaches. At the same time, mobile attacks continue to be a top form of fraud among businesses surveyed with the prevalence of mobile text SMS interception surging by 40% compared to last year. Mobile continues to be a priority for businesses and with digital trust down, more than half of executives cited identity verification via mobile device attributes as the biggest future trend in identity verification.
IDology, a GBG company, provides real-time technology solutions that verify an individual’s identity and age for anyone conducting business in a consumer-not-present environment to help drive revenue, decrease costs, prevent fraud and meet compliance regulations. Founded in 2003, IDology offers a solution-driven approach to identity verification and fraud prevention that ultimately helps increase customer acquisition and improve the customer experience. IDology has developed an innovative and on-demand technology platform that allows customers to control the entire proofing process and provides the flexibility to make configuration changes that are deployed automatically—without having to rely on internal IT resources or IDology’s customer service so businesses can stay ahead of the fraud landscape while maintaining compliance.