Top 10 Fraud Trends Predicted for 2010

January 26, 2010

This article is included in these additional categories:

Mobile Phone | Privacy & Security | Retail & E-Commerce

Fraud prevention consulting firm The Fraud Practice, LLC has released a list of predicted Top 10 fraud trends for 2010 in its biweekly newsletter.

Top 10 Fraud Trends Predicted for 2010

1. ACH/Wire transfer attacking small/medium businesses: Fraudsters are targeting the ACH (automated clearing house) network for clearance of electronic funds to send illegitimate corporate wire transfers. In 2010, they are expected to focus more on small- and medium-sized businesses as larger businesses increase security.

2. Attacks via Vendor-managed servers: Businesses that outsource their transactional network servers must ensure those vendors maintain acceptable security levels.

3. ATM skimming: Because skimming machines look identical to legitimate ATM/card reader devices, this is a difficult fraud method to detect and prevent.

4. First party fraud: Criminals gradually establish good credit using an alias with a card issuer or business and then “bust out,” running up enormous debt and abandoning the credit account. This is also difficult to detect and prevent.

5. Phishing: Email “phishing” attacks that illegally solicit victims’ personal information with official-looking requests are becoming more sophisticated, and increased 600% during 2009 according to the Anti Phishing Working Group.

6. Check fraud: Fraudsters have easy access to paper, printers and scanners to create phony checks. In addition, hackers can obtain detailed personal banking information from online check viewing services.

7. Internal fraud: Employees are increasingly a source of corporate fraud, as are contractors, business partners and suppliers.

8. Mobile phones: Mobile phone fraud is not yet a major problem but inevitably will rise as mobile phones increase in popularity and functionality. Web-enabled mobile phones are vulnerable to the same types of worms and viruses as PCs.

9. Online application fraud: Similar to first party fraud, this involves criminals manipulating multiple online applications using multiple identities from multiple access points.

10. Prepaid cards: Prepaid cards are a popular item for criminals to buy with stolen credit cards, and also customers often steal them from stores and then have them activated to obtain free spending power.

Retail Industry Demonstrates Credit Card Fraud Threat

According to the 2009 Lexis/Nexis True Cost of Fraud [pdf] study, 24% of all retailers, and 43% of large retailers with a significant online presence, reported increased credit card fraud in 2008. Twenty percent of retailers, and 28% of large retailers with a significant online presence, reported increased debit card fraud in 2008.


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