July 1, 2024

Fraud Trends for 2024

Daniel Berlind

CEO

Document Fraud

One of the most common types of fraud people encounter is rental application fraud. One in eight (12%) rental applications contains some kind of fraud.

Often, prospective renters submit a rental application, and everything looks good at a glance – their credit score, employment history, and references all appear to pass the test. However, in many cases, a landlord may realize that the potential renter has forged income documents, employment verification, or rental history to make it seem like they are more financially stable than reality proves.

This fraud can lead to leasing properties to unqualified tenants who may fail to make timely rent payments or even cause property damage.

Identity Theft

According to the FTC, an estimated 9 million Americans have their identities stolen each year, so it’s no secret that identity theft is a severe and widespread crime in our country.

Identify theft is when someone uses your personal data – like your name, credit card number, or Social Security number – without your permission to commit fraud. And the problem doesn’t only affect individual consumers. According to the FTC data, identity theft losses to businesses and financial organizations were approximately $48 billion last year.

While most fraudsters use consumer personal information to buy goods or services, the FTC states that 15% of all victims – around 1.5 million individuals in the past 12 months – said that their personal information was misused in “nonfinancial” ways, such as to get a hold of government documents or to use tax forms.

Credit Card and Bank Account Fraud

As more and more people use credit and debit cards to process online and in-person payments, business owners and consumers need to comprehend the scope of credit card fraud.

Credit card fraud has been the most common type of identity theft in the U.S. in recent years. It’s a form of identity theft where an unauthorized user takes someone else’s credit card information intending to charge purchases to the account or withdraw funds from it.

And it’s not just credit cards the scammers are after. Bank account fraud cases grew 25% in 2022 compared to 2021 (while credit card fraud increased by 13%) – many of these scenarios of bank fraud are related to debit cards, electronic funds transfers, or ACH.

Crypto Fraud

When digital currency (cryptocurrency) became popular a few years ago, it was not shocking that scammers hopped on board immediately. According to the FTC, over 46,000 individuals reported losing over $1 billion in crypto to various scams from 2021 through 2022.

And because digital currency payments don’t have legal protections or government guarantees, crypto scams are extremely attractive to fraudsters. Also, there is no bank or authority to identify suspicious transactions. It’s evident why the crypto fraud trend will continue to be a significant issue looking ahead.

Mail Fraud

It’s hard to believe that in this 24/7 digital era and practically paperless world, identity thieves would consider the old-fashioned art of mail fraud. But this issue persists.

How can you tell if you have a fake piece of mail? Mail fraud letters look like the real deal. However, the narratives are never authentic. According to the U.S. Postal Service, any fraud that uses the U.S. Mail^®reference or icon, whether it originates in the mail, by phone, or online, is considered mail fraud.

One red flag is a letter requesting that you send money or your personal information to get something of value in return – examples range from sweepstakes winnings, exotic vacations, notices of prizes, promotional checks/coupons, or other offers.

In some cases, a fraudster will send a document asking for personal information with the intent to use those details to steal money. These documents may appear to be tax documents but are not from the IRS. Other types of fraud exist to prey on the goodwill of kind, generous, and unknowing individuals, often posing as a charity to steal money.

Healthcare Fraud

Most healthcare fraud is committed by a small percentage of deceitful healthcare providers. In some instances, people pose as legitimate healthcare providers to make their scams more believable.

Approximately 25% of annual healthcare spending in the U.S. is considered wasteful, with 3–10% considered fraudulent and abusive billing.

Here are just a few of the many types of healthcare fraud:

Billing for services never delivered
“Upcoding” or charging for more expensive services or procedures than were actually provided or performed
Billing for a service visit or supplies the patient never received, also known as phantom billing
Performing medically unnecessary services to generate insurance payments
Rigging a patient’s diagnosis or medical record to justify procedures that aren’t medically necessary
Identity theft or swapping someone else’s health insurance or another individual to use your insurance
Providing or billing for health services or equipment without a license

Advance Fee Fraud

Also referred to as upfront fee fraud, advanced fee fraud is any scam that either promises to send you money, products, or services or offers you the chance to participate in a particular “deal” for a fee.

The thieves refer to these advanced fees – think membership, participation, administrative or handling fees, and taxes – because they all have something in common: the targets never see their money or the fraudsters again.

Advance fee schemes come in various forms but most commonly target victims who have lousy credit or challenges getting a loan. The scammers post online or print ads or call people with a so-called deal.

There’s also a practice called “romance scams” when a victim is told they have won a competition or inherited some money from a relative. However, they must pay a fee to release the funds to receive the money.

Phishing

Identity thieves are constantly searching for ways to get people’s personal and financial information online, a practice often called phishing.

Phishing fraudsters strategically deliver an email or pop-up message that shows up as an alert to an online user, often pointing to a sudden issue with your account. Some scammers have perfected the art of making their communications appear to come from legitimate organizations, agencies, or businesses.

Recent phishing statistics are eye-opening:

Approximately 1 billion emails were exposed in 2021, affecting 1 in 5 online users
Nearly 1.2% of all emails shared are malicious – in other words, 3.4 billion phishing emails every day
Experts believe that extortion of more than 33 million records with a phishing attack will occur this year.

With the rise of technology, AI is helping cybercriminals craft convincing emails, resulting in personalized, realistic-sounding messages. Attacks also increasingly target cloud and storage services, mobile devices, and social media users.

How to Avoid Common Types of Fraud

Let’s face it: no one wants to be a victim of any scam. To avoid being the target of the next fraudster, here are some signs to consider:

Don’t fall for an offer if it seems too good to be true. Criminals lure people in with promises of low-cost deals or high returns. If something looks too good to be true, it most likely is a scam.
Ignore the message or letter if communications don’t appear authentic. It’s not uncommon for scammers to pose as legitimate companies or even government agencies. If there’s any question, then contact the company directly to verify.
Turn them down if they ask you to use an unconventional payment method. If a business you’ve worked with previously asks you to pay in a new way — like to transfer funds to an account you don’t recognize or use a new payment link — the request may not be valid.
Never share if they ask you for personal information. Don’t share if you get a text or email requesting sensitive data like a PIN or your password. Real businesses never ask you to send these details in this form.
Utilize technology to catch these fraudsters in the act. Fraud detection platforms like Snappt are designed to catch even the smallest of alterations, thanks to their AI-enabled software.

To Sum Up

In 2024, fraud detection is paramount for every business owner and consumer. For business owners, property managers, and landlords, it can protect your reputation, finances, and integrity.

Scammers will continue to prey on distracted victims, and their technology will keep advancing and evolving. Fortunately, the tools and tactics available to avoid them are keeping pace. The key is to stay alert and invest in preventative measures to secure your personal and business finances.

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