Categories of Fraud

The increased usage of digital platforms and devices in this modern era enabled enterprises to conduct their businesses more efficiently. It also allowed consumers to complete transactions more conveniently and comfortably.

But, while the shift in the use of electronic channels has made it easier for everyone to do their day-to-day activities, this transition has also given cybercriminals opportunities to develop more sophisticated tactics to infiltrate systems for their illicit activities. Accordingly, a survey of fraud inspectors around the world has revealed that fraud risks have increased following the surge in usage of online platforms and remote services since the start of the COVID-19 pandemic.

Identity theft and phishing are common types of fraud. The former involves the use of a victim’s personal information to steal their money. Meanwhile, the latter fraud type involves sending unsolicited emails, instant messages, or text messages to a recipient. The bogus websites collect this information and use it for fraudulent purposes. Consequently, credit card fraud involves the theft of a person’s personal information from a bank. This can affect a consumer’s finances and can lead to identity theft.

All organizations face the risk of fraud, but those with weak cybersecurity systems have an increased risk of falling victim to it. Conventional identity verification methods like typing passwords are no longer enough to keep fraudsters at bay. This comes as passwords only enable access but do not verify whether the individual trying to access the platform is the legitimate account owner.

There are various ways in how enterprises can reduce fraud risks. They can start by implementing certain business practices, such as carefully monitoring transactions, limiting access to confidential information, and encrypting transactions and emails.

Moreover, organizations must stay informed on fraud trends and use robust authentication procedures. They need to replace their conventional identity verification measures with modern solutions compliant with FIDO 2.0 authentication standards. FIDO2 authentication harnesses the commonly used mobile devices for stronger authentication. This means that login is limited to the user’s registered device and often requires a secondary biometrics authentication to unlock the fido2 key.

To know more about the different types of fraud and how to prevent them, see this infographic from LoginID.