As we progress further into the 2020s, the uses of digital technologies continue to mature and expand. In particular, financial services have shifted to a primarily online format. Using online financial services allows for quick, seamless payments and online transactions, bringing consumers a whole new level of convenience.
However, the switch to virtual financing brings new risks of fraud. Whether it’s stolen credit card information or hacked payment app accounts, technology fraud presents to our financial and business well-being. Understanding these potential risks can help you and your customers stay protected.
Here are seven significant fraud risk trends for 2022.
1. Real-Time Payments
These kinds of payments are highly convenient, immediately sending funds to businesses or other recipients. Using apps like PayPal or Venmo, you can send payments or transfer money in seconds, creating a smooth transactional process.
Unfortunately, immediate payments often make it easier for fraud to occur. These are some reasons why fraud can happen in the middle of a real-time payment:
- Money conversion: Many hackers use the swiftness of real-time payments to convert the money into other forms quickly and then launder it to themselves. For instance, many will shift the money into cryptocurrency due to its lack of regulation, then send it to themselves.
- Difficult to track: One drawback of real-time payments is that it’s challenging to revoke or trace them back to the original buyer. Once a buyer pays, it’s usually final, whether from an actual buyer or a hacker. Because it’s hard to trace the payment, companies and apps are less likely to flag suspicious activity. This makes the fraud easier to achieve.
While companies are expanding ways to prevent the above risks, you’ll likely find it hard to stop them once they’re in motion.
2. Business Email Compromise
As a result of the COVID-19 pandemic, over half of American employees work from home full-time. While remote work makes life easier for many workers, it also increases the possibility of fraud risks. As more companies rely on email and other digital forms of business communication, it provides more opportunities for fraud to occur.
An example is business email compromise (BEC). This type of fraud looks like an email from a customer, co-worker or vendor when it’s actually from a criminal source. The emails typically ask you to take immediate action, like sending money via a wire transfer.
To protect your business and employees from email fraud, it’s important to alert and train them properly. Advise your employees to resist clicking on links straight away in their emails. Instead, instruct them to double-check sender identities and verify money requests with a second party before sending funds.
3. Credential Stuffing
Another common fraud trend that increased in 2021 is credential stuffing, which is likely continue in 2022 and beyond. This fraud consists of attackers entering mass amounts of usernames and passwords into websites. In doing so, they hope to hack into people’s accounts and steal critical data, like credit card information.
Unfortunately, credential stuffing continues to grow in popularity because it’s relatively easy to execute. Once bad actors have access to the account, they can change the password or saved email to make it impossible for the original user to get back into the account.
To prevent successful credential stuffing, you can try:
- Creating different passwords for each of your accounts
- Using difficult-to-guess passwords with a variety of special characters, numbers and letters
- Manually entering credit card information for purchases instead of saving it to your account
4. Pandemic-Related Phishing
Phishing is another frequent fraud scam. Attackers send fake messages, posing as major companies or organizations to garner more responses. The messages often demand that you download malicious software or send sensitive information. With the onset of COVID-19 in 2020, attackers used theuncertainty surrounding the situation to get more responses. For instance, they posed as hospital officials and sent messages about positive COVID-19 test results.
To protect you and your company from these attacks, check each email you receive for suspicious activity. Look for:
- Suspicious spelling or typos in the email address or sender name
- Threatening or unsafe language
- Pressure to click on a link for verification or more information
If you identify any of these signs, avoid interacting with the email until you can verify its source. Instruct your employees to do the same.
5. Identity Theft
Another way attackers can steal your information is through identity theft. Through email and phone calls, fraudsters can pose as government agencies or other influential figures and request highly sensitive and personal information. In turn, they can take your critical data and pose as you.
A prominent example of identity theft tactics in recent years occurred during the beginning of the COVID-19 pandemic, where many government agencies offered financial assistance to businesses and individuals alike. Attackers took advantage of this, posing as government facilities providing aid. People sent vital information like credit history or even social security numbers to fraudulent addresses, thinking they were government facilities.
To prevent identity theft, always research government financial institutions first and use the direct links on their websites. Even if an email looks legitimate, go to the official government website for more information before you submit any personal data.
6. Ransomware Attacks
Ransomware is one of the biggest cyber threats to companies and individuals in 2022. This fraud trend uses dangerous software that blocks users from accessing a computer system until they pay a certain amount of money. Many people and companies keep critical information about finances and personal records in their digital systems. Because of this, a ransomware attack could be debilitating.
There’s no 100% sure way to prevent a ransomware attack, but you can better shield your company by:
- Updating and frequently checking antivirus software
- Backing up important information
- Not clicking on suspicious links
7. Business Impersonation
This strategy involves fraudsters impersonating businesses. They trick users into sending money or critical information to the attacker. If the attackers disguise the transaction process and make it seem realistic, they lure buyers into a false sense of security. Then, the buyers complete purchases with the fraudulent sources.
Many attackers use bots to complete this process by contacting employees or impersonating places like banks or hospitals. To protect your employees’ data, instruct them to always double-check that a website or user is legitimate before they send money or input information. If they’re unsure, they should run it by the IT department first.
Prevent Corporate Fraud With Kaseware
Are you looking to prevent your business from technology frauds? Kaseware offers premier software solutions to mitigate fraud attacks happening to your company. Ourworld-class management software combines investigation and analysis into one streamlined platform. With it, you can protect your assets, identify threats and protect your company from all forms of cyberattacks.
Schedule a demo with us today to learn more about our fraud protection software.
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