Historically, times of economic uncertainty have led to increased fraud attempts. For example, both the COVID-19 pandemic and the 2008 financial crisis created increased fraud and financial scams targeting both businesses and consumers. On the cusp – or in the midst, depending on who you ask – of a recession, it will be crucial for businesses to understand the fraud landscape and take steps to detect and prevent fraud in 2023.
Here are a few predictions and recommendations to help them get started:
Bad actors will take advantage of growing economic fears with new scams.
At the start of the COVID-19 pandemic, we saw bad actors capitalizing on new fears and opportunities to carry out fraud attacks on consumers and businesses alike, posing as health and government organizations to offer health information, testing, and vaccines. With rising inflation, we have already seen a rise in attacks targeting consumers’ wallets – such as recent callback phishing scams. In 2023, businesses and consumers alike should expect to see an increase in social engineering attacks where bad actors manipulate victims into sharing sensitive information such as login credentials or payment details. For businesses, education will be key to ensure employees recognize the signs and think twice before handing over sensitive business information. To stay ahead of these trends, we provide and require security awareness training to be completed monthly by every one of our employees.
Financial organizations will see a rise in BIN attacks.
In 2020, right at the height of the pandemic, Brightwell experienced a BIN attack that we were unprepared for – resulting in $2.5 million in losses, later recouped. At the time, we were caught off guard because the tools we had in place to detect fraud only looked at the data of a single cardholder. Now, we are more prepared with machine learning tools that examine our full environment to identify patterns that could indicate fraud. Unfortunately, these attacks are now easier than ever as a result of “fraud as a service,” where bad actors or hacking groups supply software or services to enable others to carry out fraud attacks. Additionally, many financial organizations still aren’t prepared for these kinds of attacks. With another financial crisis looming, we are likely to see another uptick. Financial organizations and all businesses at-risk for card fraud attacks should look to AI and machine learning tools for smarter fraud prevention and ensure they have full visibility to identify patterns of fraud across their environment.
While new fraud tactics continue to evolve, we are likely to see more of the same in 2023.
Scammers like to stay one step ahead of fraud prevention strategy, and that means they are constantly looking for new methods, vulnerabilities, and opportunities. However, with the same old scams from the last few years still proving successful, the truth is, we’re likely to see more of the same next year. For companies that have put new fraud prevention strategies and tools in place, this is great news. But for those that have yet to take additional steps, the time is now to prepare, implementing new third-party tools for fraud prevention coupled with employee education programs.
Don’t make it easy for scammers in 2023 – get one step ahead of them with proper preparation.