The UK is seeing a surge in new account fraud based on ID verification, while the rest of the world sees numbers fall.
Fraud increased 28 percent year-on-year in the for 2020, while the global average fell 23 percent compared to 2019 levels.
The figures come from Jumio’s 2020 Holiday Fraud Report, which also found that the catch rate for selfie fraud was almost five times greater than for ID fraud. This, it says, illustrates the growing number of stolen ID documents available on the dark web for purchase and, more importantly, the growing need to determine if an ID is authentic and belongs to the user.
The report examines fraudulent attempts to open a new account using a manipulated government-issued ID and a corroborating selfie. Selfie-based fraud describes fraudulent attempts to use a picture or video (e.g., deep fake) instead of a genuine selfie to corroborate a digital identity. The fraud rate associated with the selfie averaged 4.92 percent in the UK in 2020, compared to 1.03 percent for ID-only verification.
Fraud rates in the UK, based on ID document, have almost doubled from 2017 levels, and fraud levels in November were a third higher than fraud levels from January to October in 2020. Additionally, fraud rates for UK passports and driver’s licences more than doubled from 2017 levels.
Compared to other major European countries, the UK was second only to Spain which experienced a 25 percent increase in ID-based fraud in 2020.
Importance of selfies
“This year’s Holiday Fraud Report unearths a number of interesting global fraud trends that enterprises adopting biometric-based identity verification should carefully consider as they architect the new account journey,” said Philipp Pointner, Jumio’s chief product officer.
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“It highlights the critical importance of requiring a selfie to corroborate the remote user’s digital identity. By including both ID verification and identity verification with live selfies and liveness detection during the account onboarding process, organisations can more effectively deter fraudsters and better protect their ecosystems.”
By virtue of requiring an ID and a selfie as part of the identity proofing process, Jumio says it has seen 80 percent less fraud compared to customers who only required a government-issued ID.
Fraud rates differ significantly by implementation channel and are more than twice the level for web and API-based implementations compared to SDK (mobile apps) implementations.
“The higher fraud rates are presumably the result of enabling end users to upload their own ID images instead of leveraging the webcam or the smartphone’s camera. This enables bad actors to upload manipulated ID images or use an image of a legitimate ID that was stolen or found on the dark web or through a Google Image search,” noted the company.
The online gaming and cryptocurrency verticals had the highest levels of new account fraud, suggesting that they remain ripe targets in the UK for money laundering and other forms of financial crime.
According to Gartner’s 2020 Market Guide for Identity Proofing and Affirmation, 80 percent of organisations will be using document-centric identity proofing as part of their onboarding workflows by 2022 – an increase from approximately 30 percent today.