The year 2023 has seen a significant increase in synthetic identity fraud, with nearly half of businesses reporting growth in this type of fraud, according to a report by AuthenticID. In addition to synthetic identity fraud, biometric spoofs and counterfeit ID fraud attempts have also seen an uptick, posing challenges for both consumers and businesses in today’s digital landscape.
The proliferation of AI technology has not only made it difficult to distinguish between authentic and fraudulent content but has also empowered fraudsters to create fake IDs using AI, complete with convincing computer-generated or stolen headshots and nearly undetectable document composition. This has made identity-based fraud sophisticated, difficult to detect, and scalable by bad actors, impacting how individuals make purchases, open accounts, and conduct business.
The report revealed that 50% of businesses noted growth in synthetic fraud, and biometric spoof fraud attempts tripled from 2022 to 2023. Additionally, counterfeit ID fraud attempts are on the rise, particularly in the telecom and wireless industry. This surge in fraudulent activities has led to over 30% of businesses reporting an increase in data and security breaches, transcending the traditionally-affected financial sector and extending to industries such as e-commerce and gaming.
Blair Cohen, President of AuthenticID, emphasized the record levels of breaches and business attacks in 2023 due to identity crime, leading to high economic losses and a loss of customer trust. He stressed the need for businesses to remain vigilant and stay ahead of bad actors who are leveraging sophisticated technology with relative ease.
Consumers have also reported heightened levels of identity-focused attacks, with bad actors approaching individuals via email, phone calls, texts, or social media platforms an average of six times per year. Chris Borkenhagen, Chief Digital Officer/Information Security Officer at AuthenticID, highlighted the importance of protecting identity for both business and individual security, as bad actors continuously shift strategies to exploit new opportunities for financial gain.
As AI-powered fraud continues to escalate, there are predictions that police may make the first arrest of an individual for using AI to impersonate someone in 2024. Governments worldwide are grappling with how to legislate the technology while it is rapidly evolving. Furthermore, identity fraud has become a lucrative business for crime syndicates, funding various illicit activities such as human trafficking. Organized hacking groups have utilized techniques like SQL injections and malware to exploit vulnerabilities in high-profile attacks.
In conclusion, the surge in synthetic identity fraud, biometric spoofing, counterfeit ID fraud, and other fraudulent activities underscores the need for heightened vigilance and proactive measures to safeguard against these threats in both the business and consumer spheres. As technology continues to advance, it is imperative for businesses and governments to stay ahead of bad actors and implement robust strategies to combat identity fraud and protect individuals and businesses from economic losses and reputational damage.