UK Is Reportedly Experiencing Massive Increase in Mobile Fraud, Exploitation of Open Banking

The UK is experiencing a massive increase in mobile fraud. Consumers, businesses, and government agencies are alarmed and pondering their next steps as they prepare to deal with several emerging trends that have surfaced in 2024. This, according to an update from Prove.

Influenced by technological advancements, regulatory changes, and evolving criminal strategies, fraud fighters and identity verification professionals are “having to move quickly to adapt trust, safety, and customer acquisition strategies to address these changes,” the Prove update revealed.

Here’s an overview from Prove of the key trends currently shaping this landscape:

  • Increased Exploitation of Open Banking: There has been significant growth in the adoption and use of Open Banking, and that has led to new vectors for fraud, particularly in identity verification processes. Fraudsters are taking advantage of the increased data availability and integration between different financial platforms to execute sophisticated scams.
  • Rise of Synthetic Identity Fraud: Synthetic identity fraud is increasingly becoming a top attack type for fraudsters. Criminals combine real and fake data to create new identities, and use them to gain access to credit cards, loans, and a variety of other types of digital services. Synthetic fraud is difficult to detect because it often involves creating a fake persona that does not match any real individual. There is no actual entity to identify and prosecute, and the ephemeral nature of synthetic identities has created a major problem across the UK.
  • Mobile SIM Swap Scams: There has been a noticeable increase in mobile SIM swap fraud, where fraudsters hijack a victim’s mobile phone number by convincing the carrier to switch the number to a new SIM card that they control. This gives them access to secure services linked to the phone number, including two-factor authentication for financial services. The solution incorporates Mobile Network Operator (MNO)/carrier data to promptly detect suspicious phone number behavior during critical events like financial transactions, password changes, phone number updates, and more. This comprehensive approach enables the identification of account takeover risks, device theft, unauthorized SIM swaps, and ports, among other potential threats.
  • Real-Time Payment Fraud: With the rise of real-time payments, there is a higher risk of fraud because these transactions are processed instantly, leaving less time for security checks. The UK market is particularly vulnerable due to the high adoption of real-time payment systems. The prevailing reality of life revolves around online transactions, a fact underscored by fraud data released by UK Finance. According to the data, a significant 77% of real-time payment fraud originated online, while an additional 17% were traced back to telecommunications, specifically SMS or phone calls.
  • Utilization of Advanced Technologies by Fraudsters: Fraudsters are increasingly leveraging advanced technologies such as artificial intelligence and machine learning to automate and refine their attacks. This includes using AI to mimic human behavior or to generate synthetic identities at scale.
  • Regulatory Changes and Compliance Challenges: New legislation, such as the Economic Crime and Corporate Transparency Bill, is reshaping how financial institutions can share and access data across organizations to combat fraud. This is set to improve the detection of financial crimes but also imposes new compliance requirements on institutions.

These trends highlight the dynamic nature of mobile fraud “in the UK, driven by both technology and regulatory environments.”

Financial institutions and consumers need “to stay vigilant and adaptive to mitigate these evolving risks.”

European Mobile Fraud Market Trends:

In 2024, the mobile fraud landscape in Europe is “shaped by several key trends, driven largely by technological advancements and shifts in fraudster tactics.”

Synthetic Identity Fraud: This remains a significant threat and involves fraudsters creating new identities using “a mix of real and fake data.”

It’s the most prevalent form of identity theft and poses “a major challenge for detection systems.”

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