Sumsub releases 2024 Identity Fraud Report

The report examines fraud across nations, industries, and digital platforms, presenting strategies for prevention in an evolving landscape. Sumsub officials emphasised the escalating sophistication of identity fraud. They noted that generative AI and accessible ‘Fraud-as-a-Service’ options have significantly reduced barriers for perpetrators, enabling extensive damage with minimal resources.  

They also brought up that deepfake technology, once rare, is becoming a standard threat, rendering reliance on Know Your Customer (KYC) processes insufficient as the majority of fraud occurs after onboarding.

Key Findings: consumer and business perspectives

Consumer Insights: 

• Identity fraud prevalence: 56% of European respondents reported falling victim to identity fraud. 
• AI usage: Nearly 59% of respondents interact with AI tools at least monthly, with 19.8% using them daily. 
• Responsibility for protection: 79% believe governments and businesses should collaborate to protect users. 
• Compromise methods: Weak passwords (22%) and data breaches (20%) were the primary causes of account compromises. 

Business Statistics for 2024: 

• Fraud increases: 67% of companies experienced a rise in fraud incidents, with 45% of businesses and 44% of consumers reporting victimization. 
• Regional impact: Europe recorded a 150% year-on-year increase in fraud, the highest globally. 
• Industry vulnerabilities: The dating industry saw the steepest rise in fraud (8.9%), followed by online media (7.7%), and banking and insurance (2.7%). 
• Fraud types: Fake documents accounted for 50% of fraud incidents, followed by chargebacks (15%) and account takeovers (12%). 

Deepfakes represented 7% of identified fraud attempts globally, with incidents quadrupling between 2023 and 2024. The UK saw a 118% increase in reported cases. Public concern is also growing, as 81% of respondents fear deepfakes could impact elections, with 51% believing they already have.

In Europe, identity fraud surged by an average of 150% year-on-year, although the UK experienced an 8% decline. Latvia, Ukraine, and Estonia reported the highest levels of fraud activity, while Montenegro, Ireland, and Portugal saw the fastest growth rates. 

The report also identified four key themes shaping the fraud landscape: 

• Democratisation of fraud: Advances in Fraud-as-a-Service and AI allow fraudsters to scale operations quickly and cost-effectively, with losses per event averaging USD 300,000 for businesses. 
• Collaborative fraud prevention: A growing need for cybersecurity and fraud prevention teams to work together was highlighted, as every 100th digital platform user in 2024 was linked to fraud networks. 
• Fraud post-onboarding: 76% of fraud occurs after KYC processes, challenging businesses to extend their security measures. 
• Shared responsibility: Regulatory pressure is mounting on businesses to compensate victims, with 62% of consumers advocating for a joint approach between governments and corporations.