Every year, numerous businesses worldwide get hit with billions of dollars in losses due to identity fraud. They even don’t realize how they become the victim of identity theft. In this blog post, we’ll make you familiar with common ways fraudsters commit identity theft and solutions to prevent it.
Technology has transformed the way businesses operate. It plays a significant role in helping them understand customers’ needs, target potential customers, and improve operations. However, unfortunately, technology has also brought many threats to businesses. One of the common ones is identity theft. Nowadays, cybercriminals are using technology to perform identity theft.
Identity theft has turned into the fastest-growing crime, causing substantial financial loss to businesses across the globe. According to a report, around 56% of Europeans experienced at least one type of fraud in 2018 and 2019. You will be surprised to know that one-third of them were the victims of identity theft. Denmark, the United Kingdom, and Ireland had the highest identity theft rate in 2018-2019.
This post will guide you about the common ways fraudsters commit identity theft and solutions to stop them. However, before that, let’s take a quick look at what exactly online identity theft is.
What is Online Identity Theft?
In the simplest term, identity theft happens when a fraudster steals your identity and gains access to your PII (personally identifiable information) to commit fraud. The type of sensitive information stolen by fraudsters to commit fraud may include the date of birth, address, driver’s license, bank account details, online passwords, social security number (in the United States), etc.
There are various ways impostors execute identity theft that we will learn in the later part, but before that, let’s have a quick look at some critical identity theft statistics that you must know.
- According to an online survey by the Harris Poll, around 60 million people (alone in the United States) were affected by identity theft in 2018.
- A survey reveals that around 40% of consumers worldwide are targeted by ID theft at least once.
- The European Commission’s official statistics reveal that about 41,502 data breaches were reported in Europe between 2018 and 2019.
- Javelin Research concluded that fraudsters are quick in their efforts to take over accounts. One report revealed that 40% of takeovers happen within 24 hours of a fraudster’s access to a victim’s account.
5 Most Common Ways to Commit Identity Theft
As per ConsumerAffairs, phishing via voicemails, texts, and emails is one of the most common ways cybercriminals commit identity-related frauds. To attempt this type of fraud, impostors pretend to be a genuine organization and fool a victim into opening a phishing email or text message. As soon as a recipient clicks on a malicious link, the malware starts getting installed in the background, resulting in the system’s freezing and revealing sensitive information.
In the above example, the fraudster is pretending to be a representative of the National Security Department. The email asks the recipient to click on the link to perform a verification. As soon as the recipient clicks on the link, a malicious script will activate in the background and give fraudster access to crucial information.
For more clarification, see the following example.
A data breach happens when a cybercriminal infiltrates a data source and extracts sensitive information. Cybercriminals find a way to access a company’s computer network to steal personally identifiable information. According to Statista, 25,000 data breaches cases were reported in the Netherlands between May 2018 and January 2020. Check out the number of breaches in other European countries during the same period.
A few primary reasons for data breaches include:
- Weak credentials
- Software or application vulnerabilities
- Physical attacks
- User error like improper configuration
Vishing means voice phishing is a popular way fraudsters steal personal information. Generally, cybercriminals contact businesses over the telephone and pretend to be legitimate organizations such as a financial institution or a payment service organization. The aim is to get people to disclose their personal information.
Imposing via Social Media
Nowadays, businesses are leveraging social media to promote their services or products. Do you know the information you list you on social sites can expose you to fraud? A survey conducted on 261 companies in the UK concluded that fraudsters steal crucial business information from social media sites.
For those who don’t know, pharming is a kind of online fraud that involves malicious code and fraudulent websites. A cyber attacker installs malicious code on a victim’s server, which automatically directs them to a bogus site without their consent, known as DNS cache poisoning. Thus they steal your personal information such as credit card details, personal information to commit frauds.
How to Prevent Identity Theft in Your Business?
In the above section, we learned how hoaxers could access your crucial information and misuse it. Now we will take a look at some tips to prevent online frauds.
Adopt Cyber Security Practices
There is a saying – prevention is better than cure. The majority of businesses don’t realize but weak credentials, application vulnerabilities are the primary causes of identity theft and other cyber attacks. As a business person, you must ensure that your staff adheres to cybersecurity practices. A few everyday things that you can do to prevent identity theft include:
- Avoid clicking on pop-ups, unknown links, and emails.
- Connect to secure Wi-Fi only.
- Use strong password protection and authentication.
- Enable firewall protection.
- Install security software to back up your files.
- Stick to data protection regulations like GDPR (General Data Protection Regulation).
- Give your staff training to prevent a data breach.
Leverage Online Identity Verification Solution
If you’re into a business where thousands of people use your online platform daily to buy things or use a particular service, you must implement a robust identity verification solution. It will help you identify suspicious users and stop them from using your platform for money laundering, illegal purchase, and other malicious purposes.
Look for an identity verification partner that combines face recognition, liveness detection, and ID verification in one solution to speed up the onboarding process without breaking your bank. If you’re operating in multiple countries, you must look for an identity verification solution provider that offers a cross-border solution.
iDenfy is a well-known identity verification provider that turns a customer’s device into a 24/7 ID verification terminal and face recognition system. If you’re looking to speed up your boarding process, mitigate frauds, and meet regulatory compliance, give us a try.