Incidences of account takeover (ATO) were up 347 percent and shipping fraud skyrocketed 391 percent, respectively, from 2018 to 2019, before anyone except virologists had ever heard of COVID-19. But isn’t it just like hackers to exploit a terrible situation?
Fraud experts are seeing renewed vigor among online crooks as COVID-19 confusion roils markets flooded with bailout dollars. PYMNTS’ April 2020 Digital Fraud Tracker®, done in collaboration with DataVisor, is loaded with news and trends from the frontlines of what may go down as the great fraud feast of 2020.
Good thing that some solution providers are doubling down on artificial intelligence (AI) and unsupervised machine learning (UML) as the scalable magic bullet that can scan millions of data points and find the fraudster before any damage is done.
Insurance Swindles for the Mobile Age
No sector is safe in times like these, as the April 2020 Digital Fraud Tracker® lays out in detail.
The insurance industry knows risk better than any, but that hasn’t spared insurers from a downpour of bogus claims. Allstate’s fraud-fighting efforts are featured in the latest Tracker, with Vice President of Data Science Greg Firestone telling PYMNTS, “The best prevention is really being aggressive: using AI and data to find [fraud]. Data is your friend in this regard. [Fraud is] a problem that impacts all insurance companies, and we need to focus on it and make sure the fraudsters realize that we’re not easy marks.”
Breakthroughs in AI and UML are revolutionizing fraud detection, as systems read imperceptible signals and find the fakes among millions of legitimate transactions. “AI-driven tools can pick out … warning signs among thousands of claims in a fraction of the time it would take human analysts to do so,” the report states.
eCommerce operations are often easy targets for hackers. TransUnion reported that nearly a quarter of Americans were targeted by online hackers since COVID-19 descended. Predictably, some new scams involve fakers posing as IRS agents or healthcare professionals.
Adoption of more robust systems is accelerating as financial institutions (FIs), merchants and service providers accept the sophistication and relentlessness of bad actors.
AI, UML Take the Fight Against Fraudsters
The battle is being joined by all manner of players in some surprising new ways. The latest PYMNTS Digital Fraud Tracker® notes that Google Play yanked 600 apps from its store and banished their developers after Google AI detected them serving unauthorized ads in-app.
It’s no game: The report notes that ad fraud costs advertisers up to $42 billion annually.
“Fortunately, we have the means to prevent being preyed upon. With advanced device intelligence, we can identify hijacked and malicious devices early. With advanced case management capabilities, we can enable confident bulk decisioning,” DataVisor CEO and Co-founder Yinglian Xie told PYMNTS.
“We can also centralize data intelligence to break down silos and ensure that real-time user information is available throughout an organization,” Xie said, “and we can use unsupervised machine learning to process raw data in real time to spot new and unknown patterns and trends without having to rely on rules and labels that are either outdated or irrelevant.”