The world is becoming more digital and, with that, consumers need to be wary of online scams and the threat of identity theft. Identity theft involves scammers illegally obtaining—and using—another individual’s personal information for financial gain. Generally, this is accomplished by using an individual’s credit card, setting up a new account in their name, or soliciting money for illegitimate causes. While the number of identity theft victims decreased in 2019, COVID-19 has brought fraud to the forefront, as scammers are leveraging the pandemic for profit. Read on to learn about the impact of COVID-19 on identity theft and four other trends this year:
1. COVID-19 Scams
Scammers have been able to take advantage of the pandemic by finding new methods to acquire people’s personal information, according to IdentityForce. The most prevalent method has been the use of scam posts and emails with inaccurate information about COVID-19. Similarly, many hackers have created malicious websites designed to mirror legitimate public health resources. Links to these websites can appear in emails and direct to a map of COVID-19 cases in the email recipient’s region. Instead, the user’s computer or phone might become infected with spyware or ransomware if they open the link. Avoid opening any email or unknown link for COVID-19 information, and instead use only safe and accurate sources such as the Center for Disease Control and World Health Organization websites.
In addition to identity theft concerns through malicious websites, scammers have also used the pandemic to solicit money through phony charities, promises of miracle cures and fake vaccines, and fraudulent online stores for test kits, sanitizers, and masks. People working from home amid the pandemic need to be particularly wary of identity theft and other cybersecurity threats. A good start in ensuring a secure home network is to create strong passwords for all of your accounts and to use WPA2 or WPA3 encryption.
2. Credit Card Fraud Prevails
While fraud overall was down in 2019, victims faced more substantial losses. Fraud victims lost a combined $16.9 billion in 2019, up 13 percent from the year before. The number-one source of this was credit card fraud. According to the Federal Trade Commission (FTC), there were 271,823 cases of credit card fraud in 2019, and it was the most common type of fraud among all age groups with the exception of individuals younger than 19. Stolen credit card data, including CCV numbers, can be sold on the dark web for as little as $0.50. However, existing account fraud is less prevalent than new account fraud.
3. Formjacking and New Account Fraud
New account fraud, which involves scammers using someone’s data to open up fraudulent credit accounts in their name, has overtaken existing account fraud in recent years. The disparity between the two types of fraud grew substantially in 2019, as the FTC reported 246,763 instances of new account fraud compared to 31,022 instances of existing account fraud. This represented an 88 percent increase and a 4 percent decrease, respectively, from 2018. The decline in existing account fraud can be owed in part to the widespread adoption of EMV chip technology, which prevents people from skimming credit cards.
4. Ransomware Attacks Decreasing
The increasingly widespread adoption of the cloud as a method of data storage has helped to reduce ransomware attacks, at least for individuals. These attacks, which target Windows-based applications, decreased 20 percent in 2018, which marked the first decline in ransomware attacks since 2013. However, ransomware attacks are still a major concern for businesses, as enterprise ransomware activity increased by 12 percent in 2020. Moreover, the COVID-19 pandemic has exacerbated cybersecurity concerns for businesses.
5. Millennials As Prime Targets
In terms of credit card fraud, seniors are more likely to fall victim to scams than younger people. However, millennials reported the most instances of overall identity theft in 2019, according to the FTC. A 2019 survey conducted by The Ascent found that 42.6 percent of baby boomers have been victims of credit card fraud, as compared to 33.1 percent of millennials. Conversely, FTC figures show that 170,255 reports of identity theft among individuals between the ages of 30 and 39 in 2019. This is up by 58.6 percent from the year before. Reported instances of identity theft increased less than 5 percent in the 60 to 69 and 70 to 79 age groups.
The more accounts that people have and the more transactions they make can increase their risk for identity theft. One of the potential reasons why millennials are disproportionately targeted in identity theft scams is that they generally have more credit cards and make more purchases than seniors.