Javelin Strategy & Research released its 2021 Identity Fraud Study showing victims lost $56 billion in 2020.
One of the leading drivers of identity fraud was increased online activity due to pandemic restrictions. Criminals used the opportunity to contact victims directly through email, social media, and other channels with traditional phishing schemes.
Although the overall number of transactions dropped considerably in 2020 compared to pre-pandemic levels, the use of text messaging and emails was substantially increased. Online communication for both personal and business purposes also influenced victims’ susceptibility.
Three of the most common schemes used were:
1. Spoof calls and emails using addresses and numbers that appear legitimate at first glance.
2. Passwords that were compromised long ago and new encryption tools to crack login information.
3. High-pressure confidence scams requiring identifiable information from the victim.
Shifting business practices also contributed to the rise of identity theft. Financial institutions, in particular, were forced to change operating procedures to serve clients remotely. Many shifted from in-person lending to remote services as small loans became lifelines for many people, and criminals took advantage of the changing business models.
As businesses worked to reduce friction in the service process, it only made consumers easier to target. If you or someone you know was targeted, you probably know first-hand that the frustration of a few extra authentication steps is better than having your identity stolen.
As identity theft continues to rise even into 2021, consumers are getting more serious about security. Advanced authentication and verification procedures are becoming the new normal, and identity protection services are more relevant than ever.