With Payment fraud on the rise experts are predicting the stay-at-home order could make it worse. Though this hasn’t happened yet, current e-commerce activity is showing that there could be a jump in coming months. David Mattei, a senior analyst at the Aite Group, a Boston-based consultancy, noted “Fraud is always a trailing activity,”
A client from a financial institution has already changed its fraud-loss forecast for the year. From an 8% drop, to going up 10% to 15%. Mattei said “Other financial institutions shared the same sentiment,” he added that in some cases, “they’re already starting to see an uptick,”
Unfortunately, the number of fake applications online for credit cards and personal loans are also on the rise. Mattei mentioned that one institution is seeing a 5% rate of these applications, in comparison to a rate of 1.5% to 1.8% in the past.
One tactic Mattei is noticing is human farming, which is when criminals hire people to use stolen credentials so that they can break into existing accounts or to create fake accounts. People attempting fraud use to rely on bits of code, also known as bots, to do their work, however they are now finding human activity is tougher to detect. Mattei says, in terms of amount per day, one fraud-measurement firm saw human-farming activity rise about 70% from late February to late March.
Due to this, organizations are beginning to respond. On Tuesday the Accredited Standards Committee X9 Inc. announced an update of one online-authentication standard and issued a new one in response to fraud attacks set on by Covid-19 restrictions. Annapolis, Md.-based organization has said in a news release “These standards address improved security for the increasing number of online transactions, such as those being made during coronavirus stay-at-home orders,”
X9.122-2020, is the new standard “Secure Consumer Authentication for Internet Payments,” which sets requirements in order to authenticate online transactions. In a press release the organization said “Although there are methods in use for authenticating Internet transactions, including dynamic floating PINs, one-time passwords and authenticating the cardholder via financial institutions’ online banking sites, there had previously been no standards for Internet-based consumer authentication of the increasing number of these transactions,”
An updated, X9.117-2020, “Mutual Authentication for Secure Remote Access,” creates what X9 calls an “authentication framework” This is for PINs, user IDs, passwords, and other authentication methods, this insures financial institutions know that they are dealing with authorized users rather than fraudsters.
While X9 now holds the standards in helping to address fraud during the pandemic, Mattei emphasises that X9 has been in development for a while. “This group does great work to bring security standardization to the industry… It will take some time for these specifications to make their way into commercial solutions.”
Meanwhile, vendors of online authentication technology are beginning to respond with fee relief. Melville, N.Y.-based Intellicheck Inc. mentioned on Tuesday that they are offering its Retail ID Web service free for 90 days to banks, card issuers, payments providers, and retailers. Their service will help authenticate users’ identities in order to filter out fraudsters.
Experts warn that with everyone being online there has been a rise in online fraud, these are some preventative measures that are being taken.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the Co-Founder of eMerchantBroker, the highest rated Chargeback Insurance provider 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.