Sumsub statistics show increased fraud rates in North America

The information includes Q1 2023 fraud statistics for North America and how they compare to 2022, with a basis in data collected from the US and Canada during this period.

Sumsub’s findings on fraud in North America

In Q1 2023, Canada saw the top three fraud types remain the same, whereas, in the US, 17% of fraud was attributed to identity document forgery. Following the increase in cyber threats and identity theft, organisations and platforms are implementing verification processes looking to ensure users’ authenticity and legitimacy.

The industries most impacted are also among the most regulated ones, with Sumsub’s findings showing that the top three affected industries by fraud in the US were IT services in 2022 and Q1 2023 alike, classifieds, and crypto. What is more, online media fraud had a twofold increase from 2.1% to 4.6% in Q1 2023.

Simple KYC checks are no longer enough, as to remain protected against fraud, companies need to perform checks throughout the entire user journey, with ongoing checks including transaction monitoring, risk scoring, and behavioural analytics, amongst others. Per the announcement, Sumsub combines user and business verification, transaction monitoring, fraud prevention, and case management solutions into a single dashboard, and the company has found that the global fraud trends showcased in their data highlight increased rates in North America, with forced verification and AI/deepfakes being the ones to grow most.

Forced verification has emerged as a growing trend worldwide, in North America alone increasing from 0.5% to 0.7% in 2022, and from 0.6 to 1.1% in Q1 2023. Pavel Goldman-Kalaydin, Head of AI & ML at Sumsub stated that there’s a pattern of forced verification globally when it’s visible that the person whose photo is taken or passing the liveness check is doing so involuntarily, either by force or while unconscious. As their participation in the KYC process is not active or agreed upon, if not stopped and detected in time, it could lead to crime and financial fraud. Although such cases are not yet very common, their existence comes as a ‘red flag’.

When talking about deepfakes, in North America, these doubled from 2022 to Q1 2023. Their proportion had increased from 0.2% to 2.6% in the US, and from 0.1% to 4.6% in Canada, respectively. Concomitantly, printed forgeries, which made up 4% - 5% of all fraud in 2022, decreased to 0% last quarter.

The company’s official further added that as deepfakes have become easier to make, this resulted in their quantity multiplying.  Per their statement, anti-fraud and verification providers that are not working continuously to update deepfake technologies remain behind and put businesses and users alike at risk, as having these updated comes as an essential part of modern effective verification and anti-fraud systems.