January 27, 2021

New account fraud Global rates fall 28% in UK

New account fraud in the UK has increased by 28% per year as global rates have fallen by almost the same amount, according to new data Jumio.

The online verification company surveyed millions of global transactions as of November last year to compile its annuals Holiday fraud report.

While the global average for new account fraud rates is down 23% year-on-year, it is up a quarter in the UK. Fraud rates are second only to those in Europe, after Spain, which recorded a 25% increase in IT-based fraud by 2020.

The report recorded attempts to avoid fraudulent checks using both IDs and selfies provided by the government. Fraud rates in the UK have almost doubled since 2017, according to IT documents, and revealed that fraud levels in November were one-third higher than they were in January to October 2020.

Jumio said relatively high fraud rates in the UK may be due to the high number of financial service customers located there.

The industry has been hit hard by any scams surveyed globally, although it has recorded a fall in rates since 2019. However, in the UK it was the online gaming and cryptocurrency verticals that had the highest levels of new account fraud during the year; Jumio said that was an indication of an ongoing money laundering operation.

Interestingly, the global decline in new account fraud came in one year, with many experts claiming that fraud rates have risen.

“One reasonable explanation is that more regular customers are opening accounts through online channels without seeing them in person, so the percentage of bad actors in the total transactions we process has dropped,” he said. The report mentioned.

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“Another possibility is that fraudsters have diverted their efforts to more relaxed targets of security, and they do not have to disclose personal information about themselves, such as giving a selfie, which is self-inflicted.”

The company argued that by adding selfie-based authentication to government ID uploads, companies have a better chance of weeding out fraudsters. It said it had seen 80% less fraud using this method compared to customers who only need IDs provided by the government.