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As the business world continues to turn increasingly digital, consumers and businesses have no choice but to adapt how they conduct financial transactions (and disclose personal information, indirectly). Identity-related crime strategies used by scammers also change with the times, as new trends provide criminals with ample opportunities to deceive and victimize.
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According to Lou Senko, chief availability officer for Q2 Holdings, a company that provides digital banking and lending solutions to banks and credit unions, “Identity crimes are always a challenge for consumers” — and for institutions trying to differentiate between honest customers and “bad actors.”
“Financial institutions are seeing these types of scams show up for new digital account openings,” said Senko. “Since the financial institution doesn’t have an existing relationship (behavior profile) of the prospective new user, it becomes difficult to detect. There are several tools available to detect and block automation, non-human actors, and behavioral analysis matches for existing users. Still, a new, previously unknown user is more difficult to identify.”
However, financial fraud is but one result of identity theft. According to the Identity Theft Resource Center (ITRC), social media takeovers and business data breaches cause irreparable personal and professional damage, and show no signs of slowing down this year.
The following is a list of ITRC’s eight identity theft trends that everyone should be aware of for 2023, as well as some suggestions on how to protect yourself from identity theft — including one measure you may not have considered.
8 Identity Theft Predictions for 2023
- Protecting Your Digital Information Is a Must: In an increasingly digital world, identity scammers can more easily impersonate you and steal your personally identifiable information (PII). Be on the lookout for social engineering and phishing scams and attempts to compromise your non-financial social media accounts.
- From Romance to Relationship Scams: Romance scams are certainly not dead, but for bad actors looking to exploit and steal, the ITRC forecasted that criminals will attempt more platonic relationship-type scams in 2023.
- Specific Ethnic Groups Will Be Targeted: The ITRC predicted a rise in scams involving ethnic groups or immigrants often challenged by various cultural and language barriers.
- Password Protect Yourself: People who enable multifactor authentication on their accounts — and those who use Passkey and other passwordless tech — will be better protected. Those who refuse to adapt and protect themselves are at higher risk.
- The Generation Game: The ways different generations use technology, payment applications and contact processes will be matched by the ways scammers target individuals.
- Payment Apps Will Provoke Legislation…: The rise in popularity of mobile payment apps like Venmo or PayPal will make it easier for thieves to trick people into sending them money — and harder for victims to get their money back. The ITRC predicted Congress or the Consumer Financial Protection Bureau (CFPB) will get on board this year to regulate abuse of these apps.
- …but Congress Will Remain Inactive on Broad Protection Laws: The U.S. currently works with a patchwork system of sector-specific laws that fail to adequately protect data. As the ITRC stated, “Despite continued evidence that data breaches are giving scammers the information they need to craft more effective phishing pitches and account takeover fraud, Congress will fail to pass a comprehensive privacy and data security law in 2023.”
- Data Compromises Will Continue To Rise in 2023: As people and businesses continue to practice poor cyber-hygiene, the number of victims will continue to grow.
How Can You Protect Yourself from Identity Theft?
Scammers are deceitful and will try anything to target the vulnerable or the technologically-hesitant. Practicing common-sense and smart cyber strategies — being skeptical and disengaging with any suspicious contact, resisting giving out any personal information, refusing to pay an unknown or suspicious contact when requested, and enabling password protection tactics on all your devices — won’t deter thieves from trying to steal your identity… but it will lessen their chances of being successful.
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For those who are concerned about identity theft and the possibility that their information might be exposed to a data breach, freezing your credit is a good idea, according to Senko.
“The most effective thing the average person can do is proactively freeze their credit with the three major bureaus,” recommended Senko. “From there, the credit freeze must be managed by the individual (unfreeze the account or suspend) when they want to perform a transaction that requires the credit service themselves.”
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