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Home.forex news reportIdentity Fraud in the Age of AI: Account Takeover Scams Soar 250%

Identity Fraud in the Age of AI: Account Takeover Scams Soar 250%

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Identity fraud is no longer a localized nuisance but
has become a global problem due to accessible AI tools and sophisticated fraud
networks. This has enabled even amateur criminals to exploit weaknesses in
systems worldwide.

This is according to Sumsub’s latest identity fraud report, which revealed that fraudsters are weaponizing technology, from fake IDs to deepfakes, making it imperative for businesses and consumers to rethink their defenses.

The Democratization of Fraud

Fraud has become increasingly accessible due to the
rise of fraud-as-a-service platforms and AI-driven tools. Criminals now reportedly rely on
ready-made systems that require minimal expertise to execute complex schemes.

Fake IDs and altered documents remain the most
prevalent form of identity fraud, comprising 50% of all reported cases. This
trend is fueled by advanced forgery tools that make it easier to manipulate
passports, IDs, and proof of address. ID cards alone accounted for 70% of fraud
involving documentation.

The report found a significant 250% year-over-year increase in account
takeover (ATO) fraud. In this case, cybercriminals use stolen credentials, often obtained via malware or data breaches, to gain unauthorized access to victims’ accounts.

A notable breach in April 2024 targeted a US-based
cloud platform, revealing weaknesses even in advanced systems. Chargeback fraud
continues to plague the e-commerce and digital goods sectors.

Fraudsters exploit payment system loopholes, resulting
in significant losses, such as the $38 million incident involving Nigeria’s
Interswitch. Additionally, the research found that businesses relying heavily on online transactions remain
vulnerable during peak shopping periods.

Deepfakes accounted for 7% of identity fraud cases in
2024, with usage skyrocketing four times compared to 2023. Fraudsters now use AI to
impersonate individuals in verification checks, manipulate elections, and
execute financial scams.

Identity Fraud Per Region

Latvia, Ukraine, and Estonia lead Europe in fraud
rates, though some countries like Belgium and the UK show improvements.
However, deepfakes remain a top concern, with 80% of respondents believing they
influence elections.

With Singapore experiencing a 207% surge in fraud, the
APAC region emerged as a fraud hotspot. Weak passwords and phishing dominate as
primary attack factors, highlighting a need for robust regional regulations.

Nigeria’s fraud rate doubled in 2024, reaching 5.91%,
the highest in Africa. Similarly, the Middle East faces mounting threats, with
Syria seeing a 393% increase in fraud. Concerns about deepfakes influencing
elections remain high in both regions.

The report highlighted that traditional defenses are no longer sufficient, with fraudsters not turning to AI and deepfakes. To solve this problem, businesses must adopt
multi-layered security strategies, combining advanced AI tools for detection
with consumer education on digital hygiene.

This article was written by Jared Kirui at www.financemagnates.com.



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