A new report recently released by Aite Group discovered that an astonishing 47% of U.S. adults have fallen victim to identity theft over the past two years. During that period, total fraud ballooned to $712.4 billion in 2020 – up from 42% in 2019.
This drastic leap in identity theft has many wondering what has changed? Why the massive spike in fraud? The startling rise in fraud attempts appears to be in part from the rush of e-commerce and other card-not-present activity over the past couple of years, especially last year.
The coronavirus pandemic significantly impacted the way consumers choose to shop and make their purchases. More than ever seen before, shoppers have turned to the internet and their mobile phones to comply with social distancing, stay-at-home orders and business shutdowns. In turn, this has created an opportunity for cyber criminals.
A study by TransUnion LLC released in January found that there were 100 million suspected fraudulent transactions in the six weeks following March 11, 2020 – a 5% increase from the same period the year before. However, this identity theft goes well beyond fraudulent credit card transactions. Methods like account takeovers are on the rise and create quite a web of confusion for victims to untangle.
Of the more than 8,600 consumers surveyed in Aite’s study,
- 37% have been a victim of at least some kind of application fraud.
- 25% have been affected by fraudulent applications for credit cards.
- 27% have been affected by fraudulent checking-account applications.
- 38% reported having been victimized by credentials being hacked.
During the pandemic, consumers began to rely more heavily on services like Venmo and Zelle to more easily transfer funds and make payments. As a result, account takeovers have involved more peer-to-peer payments in 2020, compared to fraudulent activity in 2019.
This increase has caused consumers to take even further steps in changing their behavior and habits. Overall, 63% of consumers hit by ID theft made changes to their banking activities. Even the 74% of those who did not experience fraud did the same thing.
As the problem continues to grow, merchants – of all business types and industries – are having to dig deeper into how they can fulfill these two, ever-growing needs: provide the payment processing options consumers today expect, while also safeguarding their sensitive information to instill trust. All in all, the key for business owners is to partner with the right processing provider.
Make sure the provider you work with understands your industry’s unique situation and your customers’ needs and preferences. They should have years of experience working with your business type, and a passion for keeping up with the latest technology and safety measures.
Author Bio:- Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.