7 Types of Identity Fraud Everyone Must Know
The increasing reliance on digital interactions has streamlined many life aspects but at the same time, it has also given rise to serious crimes and fraudulent activities. In today’s fast-paced and modern world, where personal and sensitive information is available online, cybercriminals leave no stone unturned to get access to other’s sensitive information and exploit the acquired information for illicit activities.
What is Identity Fraud? Quick Insights
Identity fraud often used interchangeably with identity theft has become a serious crime in today’s digital world, where cybercriminals steal or manipulatively obtain other’s identities to carry out illicit activities. The acquired information is exploited to log into digital accounts, get access to banking services, or torment the reputational image of the victims. The motives behind online identity fraud are immoral and unscrupulous.
Often the stolen or replicated identities are employed to generate synthetic media either images or videos, accurately resembling the victims. These fabricated identities are used to spread false information, manipulate people’s perceptions, and damage the societal image.
How Online Identity Fraud Takes Place?
Online identity fraud has become a growing concern as tech-savvy fraudsters use advanced and technical tactics to get their hands on confidential information.
- Cybercriminals target victims by phishing attacks sending them fraudulent email or text messages and pretending to be legitimate bodies or official channels. Via fraudulent emails or text messages, users are asked to share passwords or sensitive information. Most of the users don’t verify the source properly and end up sharing their confidential information, leading to identity theft.
- Skimming devices are also used to steal credit card information or other details. These devices are launched at ATMs, fuel pumps, or point-of-sale terminals to steal credit card information.
- Often cyber fraudsters conduct data breaches to hack or compromise organizations’ sensitive data leading to the exposure of information of thousands of people.
- Taking advantage of human psychology, cybercriminals employ social engineering tactics to manipulate vulnerable people into sharing personal information.
Widespread Forms of Online Identity Fraud
Online identity fraud comes in various forms, each type profoundly impacting the victims and leaving devastating consequences.
- Synthetic Identity Fraud
As the name indicates, this is an advanced form of identity theft, where personally identifiable information of victims is stolen and blended with false information to create a whole new identity. The fabricated identity is used to open digital accounts and conduct illicit activities. As it’s arduous to identify fake identities online, fraudsters make use of this loophole and execute illegitimate activities in the disguise of others without even their knowledge.
- Credit Card Fraud
Fraudsters use skimming devices, card readers, and hacking to access the credit card details of the targeted victims. The credit card details are then exploited to conduct potential transactions and make large wire transfers. This form of fraud badly impacts the financial well-being of the victims, impacting their psychological state.
- Medical Identity Fraud
Using a patient’s medical identity comes in negative as well as positive connotations. Family members or close friends of the patients use the medical identity to avail of medical services. On the other hand, fraudsters steal or manipulatively obtain details of patients’ medical IDs and exploit the acquired identity to gain unauthorized healthcare services.
- Account Takeover (ATO) Fraud
Cybercriminals use hacked or manipulatively acquired account credentials and log into accounts gaining unauthorized access. The hacked accounts can be bank accounts, social media accounts, e-commerce accounts, or online shopping accounts. After gaining access to digital accounts, fraudsters conduct illegitimate activities for personal benefit.
- Unemployment Fraud
Each jurisdiction has varying standards regarding unemployment benefits, most countries offer compensation to unemployed citizens to facilitate them financially. But fraudsters are always finding an opportunity that could benefit them in any way, they often claim unemployment by using unemployed citizen’s personally identifiable information (PII). This type of fraud is highly immoral as resources are diverted from deserving individuals to fraudsters.
- Biometric Identity Theft
Tech-savvy cybercriminals have become so sophisticated that they not only spoof passwords and account credentials but also compromise biometric data. Fraudsters conduct AI identity fraud and replicate fingerprints or facial features to create mask attacks or highly realistic deepfakes. These fabricated identities are used to spread false information, gain money, or diminish public image.
- Tax Fraud
This is a highly concerning type of identity fraud where malicious actors acquire victims’ personal information, particularly social security numbers via hacking or data breaches. The acquired social security numbers are exploited to steal tax refunds, profoundly impacting the victims and the victim may have to face potential tax penalties.
Concluding Thoughts
Online identity fraud has become a growing concern affecting millions of people globally and causing loss of billions of dollars. To stay ahead of the fraudster’s nefarious activities, it’s crucial to establish robust identity theft protection measures and educate online users to secure their digital personas. Staying alert and limiting oversharing of confidential information can play a critical role.