The percentage of suspected digital fraud attempts in financial services more than doubled in the U.S. during the first four months of 2021 compared with the final four months of 2020, according to a new study from TransUnion.
The change is likely driven by an uptick in phishing attempts wherein fraudsters acquire personal information from unsuspecting consumers, which they can leverage when applying for credit.
Melissa Gaddis, senior director of customer success, global fraud solutions at TransUnion, said the pandemic has forced more online transactions across industries, providing more opportunities for successful phishing attempts.
“Not everybody is comfortable going back into stores or banks,” Gaddis said. “We believe that businesses overall are going to maintain a higher level of online presence than they did before the pandemic hit.”
Cases of identity theft in automotive lending reported to the Federal Trade Commission jumped 35 percent quarter over quarter at the onset of the coronavirus pandemic last year and have remained above normal levels throughout the crisis, said Lee Cookman, director of product strategy at TransUnion.
“We saw auto continue to grow and be at the highest levels that we’ve seen in years for reported ID theft fraud,” Cookman said. “And certainly, the exposed credentials become part of it.”
Dealerships and auto lenders will face an ongoing challenge with identity verification as digital retailing transactions continue to rise. Informing customers about their options to protect their credit information and other personal data and training employees on the right procedures to verify identity could help prevent fraud scams from reaching the dealership.