Onfido research finds increase in ID fraud

The report reveals that the risk of identity fraud has increased significantly with attacks occurring more frequently since the start of the pandemic. Over the past 12 months, the average identity document (ID) fraud rate grew by 41% over the previous year. The average ID fraud rate reached 5.8% - up from 4.1% the previous year (Oct 2018-2019). 

In addition, fraudulent activity peaked in July and August. Large parts of Europe have encountered a ‘second wave’ and re-entered lockdown. This, coupled with the spike in online activity for the holiday shopping season led Onfido to predict that fraud rates would start to climb again in the last few months of the year. 

The explosion in ID fraud since the beginning of the pandemic has also given rise to a number of new trends for identity fraud:

• Fraud is becoming the new ‘side hustle’ – In 2020, the proportion of unsophisticated fraud grew 23% year-over-year, from 57% in 2019’s Fraud Report to 70%. Given that the amount of sophisticated attacks stayed the same, at under 1%, this suggests that first-time fraudsters might be trying unsophisticated attacks as a new side hustle outside of their regular work to shield them from the economic downturn.

• ID Fraud is no longer just a 9-5 job – In 2019, Onfido identified that many fraudsters treated it as a 9-5 job: attacks were higher on weekdays and dropped off over the weekends. Now, the suspected fraud rate is staying almost level over all seven days of the week. 

• Emerging trends in biometric fraud – In 2020, Onfido has identified a growing use of 2D and even 3D masks to attack both our selfie and video verification products. There has been an increase in replay attacks, where fraudsters attempt to circumvent cameras entirely and upload stolen videos or deep fakes. This was the first year Onfido saw deepfakes used; a tactic likely to quickly grow in popularity as they are cheaper to create than good 3D masks.

• Suspicious behaviour now harder to detect –With so much volatility in the market, businesses across all industries need to be extra-vigilant and recalibrate their friendly friction threshold; the difficult balance between fraud risk and customer experience.