What You Need to Know About Current Online Fraud Trends

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What You Need to Know About Current Online Fraud Trends

Fraud. Even the word itself sounds threatening.

Being the victim of fraud can leave you feeling defenseless, violated and at a complete loss. With the rise of the digital age, acts of fraud have evolved to include much more than faulty checks.

It’s also much more sophisticated than the early days when Nigerian letters and misrepresented eBay items were some of the most common scams.

Online fraud has the potential to wreak havoc on a person’s financial stability and personal reputation. To safeguard your privacy and stability, get the facts on current online fraud trends below.

Data Breaches

Think Target 2013 and this year’s Ashley Madison scandal. In a data breach, fraudsters not only steal your personal information but also dump it online for everyone to see.

During the 2013 holiday season, over 40 million debit and credit cards belonging to Target shoppers were exposed through the now infamous data breach. This fiasco greatly damaged Target’s reputation and profits.

Just this past August, the retailer giant reached an agreement to pay out $67 million to Visa users affected by the breach. They’re expected to pay a similar amount to affected MasterCard users.

As for the Ashley Madison scandal, over 32 million users had their personal information exposed in a data dump totaling 9.7 gigabytes in size. This sensitive data included more than names and log-in information. Years’ worth of credit card and transaction statements were left online for all to see.

The long-term effects of these historic data breaches are not yet known. However, one thing is for sure—these acts leave sensitive data highly accessible to people with bad intentions.

Account Takeover

Account takeover is quickly becoming one of the most common types of online fraud. Its popularity with hackers and fraudsters is only on the rise.

During an account takeover, an individual assumes your account to access your PII (personally identifiable information). PII may include your social security number, bank account information and even your medical history.

What can we learn from the surge of account takeovers? PII is especially attractive to hackers, and they’ll do just about anything to get it.

Account Creation Fraud

Unlike account takeover, account creation fraud centers around developing new accounts for illegal purposes. According to a study performed by NuData Security, 57 percent of all account creations from May to July of this year were found to be fraudulent or high-risk.

These fraudulent accounts allow individuals to get more mileage out of your PII by opening a new credit card, leaving fake product reviews for cash or purchasing items online.

It’s also difficult to know where your information will end up once it’s been compromised. In some situations, it may be used to open multiple accounts for multiple individuals. This kind of ripple effect can cause damage for years to come.

Online Shopping

With the popularity of e-commerce, it’s no surprise that fraudsters are integrating themselves into the world of online shopping. But here’s the thing to remember—this kind of fraud has little to do with fake online auctions and everything to do with credit card fraud.

Hackers can access sensitive data stored on mobile devices and computers to make false purchases. This technique results in a loss of revenue for retailers, a nice bit of cash for the hacker and a breach of personal data for the fraud victim.

Tips for Avoiding Online Fraud

You don’t have to stop banking or shopping online to reduce your risk of experiencing fraud. Here’s how you can stay smart while enjoying the convenience of the digital age:

  • Always review your banking statements and transactions carefully.
  • Avoid using shared devices and networks whenever possible.
  • If you must use them, don’t share your PII.
  • Only buy from reputable, established online sellers.
  • Before working with a financial institution, check to see if they’ve had data breaches in the past.
  • Use services like PayPal when buying online.
  • Avoid wire transfers, which is the equivalent of sending cash.
  • Never send or share your PII on unencrypted, unsecure websites.
  • Stick to a credit card when shopping online. Investigating faulty charges can take some time, and you don’t want to incur fines because of a lack of funds.
  • Contact your bank, credit card company and/or other financial institutions immediately if you suspect you’re the victim of fraud.

Finally, to learn more about how to protect yourself online, contact our team of security experts at Prudential Associates.

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