Trending fraud in 2024
Many active players are involved in the growing battlefield of fraud. On the victim side, there are individuals, businesses and law enforcement looking to navigate increasingly sophisticated attacks. On the criminal side, there are individuals, tools and even organizations at work to carry out high-level scams. Since this is the case, the nature of fraud is always changing. In this article I'll explore fraud trends to look out for in 2024.
Fraud is a back-and-forth struggle between those who are victims of fraud and those who are perpetrators of various fraud schemes. As we, in the payments and fraud prevention arena, learn more about how to rise up and navigate fraud attacks, criminals also adapt their practices to find new ways to overcome our efforts. In many cases, they devise new fraud practices that can have even larger impacts on their victims than earlier methods.
Common fraud trends
This year, fraud continues to take a digital turn. The world is heavily focused on digital tools for every need. From social media to online banking, there are plenty of digital spaces for fraudsters to exploit. In fact, global digital fraud losses were projected to meet or pass $343 billion globally last year see.
Following are several online and in-person fraud trends to watch out for:
Family fraud: As difficult as it is to fathom, the reality is that family fraud is an enduring type of fraud that puts people at risk every year. With each new day, more people are deceiving their families to acquire money, privileges and more. The worst part? Relatives often don't expect it.
Family fraud comes in many forms. It might include signing up for a service under a relative's name or directly stealing money from a relative's accounts. At the end of the day, the people who are closest to you, often the ones you trust the most, can put you at significant risk of being a fraud victim.
Customer chargebacks: For the longest time, businesses and customers have had a fairly even balance when it comes to interactions. Unfortunately, the digital nature of many modern stores is making it much easier for companies to be placed at risk. Indeed, ecommerce fraud directed at companies was expected to pass $48 billion in 2023 see.
When using chargebacks fraudulently, customers will purchase something from an online retailer. Even when they receive the item, they will go to their bank and claim that the charge wasn't accurate or they didn't receive their product. The bank will then take the money back on behalf of the customer—even if the customer is lying. This is impacting businesses of all sizes, but there is no denying it hits small business owners much harder.
Shopping bots: Popular products have always gained significant attention from customers and resellers. Unfortunately, the modern world has learned to weaponize this interest. We first saw its potential when people would wait in line for hours at a time to acquire something like the new iPhone. Now, with digital offerings, bots are doing what no person can.
Shopping bots are being used to target launches of exclusive products, like concert tickets, making it possible for bots to buy a high volume of a product before real people can. The owners of these bots then turn around and sell the products at a huge markup, creating a far worse experience for customers.
Phone farms: We all love the convenience offered by smartphones, but smartphones are now being turned against us. Prominent in this growing trend is the use of phone farms, which are collections of mobile phones being used to artificially recreate human interactions on devices 24 hours a day with little to no human intervention see.
For companies, there is a lot to lose. Many businesses offer paid benefits to people for carrying out certain tasks, like giving feedback, interacting with services, or participating in market research. Now, using technology, people are buying up phones and letting them fake these tasks for them while they collect the rewards.
Companies lose in two distinct ways when this happens. The first is that a company might end up paying someone for a task that they didn't do. Ultimately, this means that they are paying to be tricked. The second affects the market research side of the process. When people use phone farms to fake surveys and feedback or post comments, they create a false narrative about the actual customer experience. In the end, it means companies are working off of information that is completely inaccurate.
Social media bots: In line with phone farms, social media bots are a huge area of concern that can lead to issues for both individuals and companies. These bots are being used to artificially inflate the online presence of people and products.
They manage this by faking engagement. In practice, this might be purchasing followers or fake reviews. No matter what, it allows people to pretend that their brand or products are genuine when they are not. In 2016, it was determined that one out of five social media posts about U.S. politics were made by bots see.
Business and personal identity theft: Everyone has a social media presence, and now scammers are using these online presences against us. Impersonating individuals and companies is becoming more common, and fraudsters are using this method to scam innocent people every day.
From catfishing on dating sites in order to trick people out of their money to selling under another brand's name, these crimes involve criminals using public information for their own gain. They are leveraging trusted people and brands and impersonating them to interact with those who know them.
Scam organizations: Everyone wants to think that fraud is a one-off occurrence, but that is not the case. Around the world, criminals are creating full-scale organizations to drive their fraud efforts. The days of singular phone scams are behind us. Today's scammers have entire offices and actively employ people to participate in their schemes.
Fraud is always changing, but our world is always adapting. As long as we all remain aware of these risks, we can take active steps to discourage fraud and protect ourselves. When it comes to operating safely in the digital world, knowledge really is power. Be sure to stay up to date on the latest fraud trends, so you don't end up as a victim yourself.