Online payment fraud losses are set to more than double over the next five years to reach a staggering annual figure of $48bn, according to Juniper Research.
The analyst’s latest report, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2018-2023, covers e-commerce, airline ticketing, money transfer and banking services.
It claimed that the astonishing growth in fraud will be fuelled by a continued epidemic of data breaches.
Increasingly common will be moves by the fraudsters to use pieces of this breached identity data plus PII on other individuals and/or made-up information to create new, “synthetic” identities.
“Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioral giveaways that indicate this type of fraud,” said research author Steffen Sorrell.
“Fraud management providers have solutions on the market to combat this, but the industry as a whole is playing catch-up.”
Synthetic fraud is reportedly the fastest-growing type of identity fraud in the US, accounting for an estimated 80-85% of the total.
“The point to remember is that with Synthetic ID Theft is that since it is not your name, address, phone number or credit file….credit monitoring, fraud alerts or credit freezes will not inform you or stop synthetic ID theft,” warned the FTC.
As instant payments become more prevalent, but fraud teams continue to focus on transactional rather than behavioral risk, losses in the money transfer sector could rise by 20% per year to hit $10bn by 2023, the Juniper research continued.
The underground fraud-as-a-service’ economy will also continue to mature, resulting in greater complexity, the report warned.