During the holiday season, we tend to worry more about everything amid the frantic pace of life. Fraudsters use this by taking advantage of us when we’re the most distracted. Now, it’s more important than ever to protect ourselves against identity theft.
The increase in data breaches has jeopardized the identity of millions of consumers. Somehow the glitz and glamour of the season make us forget about these invasive crimes that have wreaked havoc on our financial well-being. We tend to let our guards down, surf on websites for deals (or to find that special person the best present) and don’t check our credit reports as often as usual.
In fact, this is the time of year that the risk of identity fraud increases due to digitally connected consumers. Online retail sales increased 14.7 percent year over year during the 2017 holiday season to $108 billion, according to Gartner.
So how exactly do you protect your identity during the hustle and bustle? While the use of EMV in cards has helped to mitigate fraud perpetrated at retail stores, undeterred fraudsters have focused their efforts online. Card-not-present fraud increased by 40 percent in 2016 due to increased use of digital channels to complete purchases. Account takeover tripled between 2016 and 2017, with losses reaching $5.1 billion.
Detect and Prevent Identity Theft
How advanced analytics can uncover the fast-growing incidence of synthetic identities.
How can advanced analytics and machine learning help combat this threat?
It’s more important than ever for businesses to keep an eye out, in real time. During the holidays, not only is there a spike in overall transactions, but customers tend to have odd buying patterns – for example, purchasing a very expensive watch or buying something from a boutique vendor overseas to get that unique gift. By flagging good customers as fraudulent, your organization may cause stress and anger, decreasing their joy and patience, as well as their positive view of your organization during the holiday season.
This is where multiple analytics methods can help you find more identity fraud faster and spot emerging fraud tactics that don’t resemble historical patterns. For example, anomaly detection and predictive analytics can uncover new types of fraud by examining what’s happening right now, not just comparing it to the past.
Self-learning techniques, such as machine learning, take identity fraud detection to the next level. Systems with this built-in technology adapt to changing behaviors. With every iteration, the algorithms get smarter and deliver more accurate results. It’s easy to see the value of both to combat fraud, protect the identity of your customers and safeguard the reputation of your organization.
Tips to protect your organization
Here are some simple tips your organization can follow to protect against fraudulent activity during the holidays:
- Reinforce company internet and device policies. Now is a great time for companies to review internet and security policies with their employees. Make sure employees know the best practices of browsing and logging in from remote locations – like the homes of family members.
- Watch out for the real red flags. While not every customer who displays these behaviors is a criminal, knowing what to look for could help you spot a potential financial predator before it’s too late. For example, multiple cards used from a single IP address or multiple transactions on one card or a similar card with a single billing address, but multiple shipping addresses. Again, this is where advanced analytics and machine learning will help bolster your fraud detection!
- Make sure systems are secure. Making sure that your business is discreetly handling sensitive customer information is crucial in keeping your customers and your business safe. Train your staff on proper handling of confidential company information, including financial, personnel and customer information.
- Think internally, not just externally. Organizations should also be aware of what is going internal to their ecosystem, as well as what’s leaving. People are working remotely more than ever, which can put your company at greater risk for a security breach by just having company-owned devices out there for fraudsters to steal and/or hack into Wi-Fi networks. Far too often you’re sending an email at a coffeehouse and don’t think about the sensitive information on work devices that may be at risk.
4 simple ways to protect for your customers to protect their identities during the holidays
With more transactions occurring through digital channels, organizations need to be more proactive with educating customers on how to protect their identity. Once identity thieves have personal information, they can drain bank accounts and run up charges on credit cards, damaging not just customers, but also financial institutions and merchants. While fraud instances are up during the holiday season, here are some best practices for your customers to keep in mind year-round.
1. Shop securely online and through mobile devices. It’s important that you only shop from retailers you know and trust. When surfing the web for gifts, be sure to look for icons such as a padlock or unbroken key at the top or bottom of your browser as a sign that encryption is used. There are signs to help indicate that a website is secure, such as “https" in the URL and an icon of a locked padlock on the left side of the URL.
Also, avoid using a public Wi-Fi connection. Digital personal information transmitted over the internet or stored on your connected devices – such as your driver’s license number, Social Security number, credit card numbers and more – could be vulnerable if the network isn’t secure.
Tip: Use a virtual private network, or VPN, which encrypts the data moving to and from your laptop. The encryption protects your internet communication from being intercepted by others in Wi-Fi hotspots.
2. Be aware of holiday email scams. Crooks are hoping to trick eager and generous consumers into giving up their personal information with fake holiday scams. Check that emails sent to you with promotional links don't point back to a fake alias link, often with one or two letters missing or changed. This could signal a phishing scam designed to fool you into entering personal information like your credit card number or your email and password, which may later be used to compromise your identity. Remember, if it sounds too good to be true, it usually is.
Tip: Never respond to emails or text messages requesting sensitive data unless you know and trust the source.
3. Monitor accounts. One of the best ways to protect yourself is to be aware of warning signs that your identity has been compromised. Always check over your credit card statements and credit reports, especially during high-volume shopping periods like the holiday season. Remain vigilant and inquire about any suspicious activity to catch any attempt at identity theft before it escalates.
While you are monitoring credit reports and bank accounts, regularly review your online account info. Things like regularly reviewing transactions online and making sure account contact info hasn’t changed are also good for keeping tabs on anyone trying to hijack your account.
Tip: You can enroll in a credit monitoring service. If anything changes on your credit report, the company sends you an alert – and some services even offer identity theft insurance.
4. Safeguard and strengthen passwords. It’s important you safeguard the accounts containing personal information with a strong and unique password. The more complex your password is, the more difficult it will be to crack. An online account containing your sensitive data should not be locked with passwords like “12345” or “password.”
Tip: Your phones and computers can be gateways to your personal information, so make sure they are protected with strong passwords containing numbers, letters and symbols.
- Payment fraud evolves fast – can we stay ahead?Payment fraud happens when a criminal steals a person’s private payment information, then uses it for an illegal transaction. As payment trends evolve, so do the fraudsters. Banks and PSPs can fight back with advanced analytics techniques that adapt quickly to spot anomalies in behavior.
- What do drones, AI and proactive policing have in common?Law enforcement and public safety agencies must wrangle diverse data sets – such as data from drones – in their proactive policing operations. To be most effective, they need modern tools that support AI techniques like machine learning, computer vision and natural language processing.
- Rethink customer due diligenceTo streamline compliance and protect against financial and regulatory risk, re-examine your customer due diligence processes and technologies regularly. With new analytical tools, you can monitor customer transactions or personal information in real time, and accurately segment customers by the risk they represent.