9 types of fraud the FinTech industry needs to beware of in 2022

9 types of fraud the FinTech industry needs to beware of in 2022

By Edlyn Cardoza

Identity fraud is the act of using stolen information of a person’s personal or financial information. This crime affects whose identity has been stolen and the businesses where the stolen identity has been used to make forged transactions. Imposters use identity details to obtain credit cards, state benefits, loans, take over the existing accounts, open bank accounts, etc. 

Criminals commit such crimes by stealing your information by contacting you and pretending to be from a legitimate organisation. There is no denying that the internet creates smarter ways for our day-to-day activities with each passing year. Digitisation in every aspect has made this easier for criminals today. 

Driven by the pandemic and the increasing number of digital transactions, identity fraud losses reached a total of $56 billion in the US in 2020, according to Javelin. Unwavering throughout 2021, identity theft and fraud continue to plague consumers and businesses alike, leaving many to wonder what this could mean for 2022.

With the year ending and fraudsters finding new ways to hack into systems, Mike Cook, Vice President of Commercialization – Fraud Solutions at Socure, and an industry expert in data breach, fraud patterns, and identity theft, analysed the current fraud landscape and shares his nine predictions for the year 2022:

• First-party fraud: We can expect to see explosive growth in first-party fraud due to BNPL and the use of pre-qualification “soft inquiry” credit report pulls. 

• ID Theft: We will see a rise in ID theft reports due to data breaches and new system vulnerabilities introduced in Q4 of 2021. 

• Bot Attacks: There will be increased fraud attempts in new accounts due to bot attacks.

• Imposter scams: Imposter scams, currently the second most common type of scam, will triple. 

• Regulatory developments: The government will take a more active role in the fight against fraud. 

• Deepfakes: Deepfake technology continues to advance rapidly and will create havoc for the uninformed. 

• Buy Now, Pay Later: The BNPL industry will experience greater fraud losses and tighten its fraud technologies as a result. 

• Crypto and money laundering: Cryptocurrency will increasingly be used as a money-laundering tool. 
• Money mules: The use of money mules will grow in popularity, with the younger population increasingly targeted. 

ALSO READ: Cybersecurity in Financial Services Report 2021