Frank on Fraud’s Predictions: 11 Trends to Look for in 2024

Fraud Predictions 2024

Each year, Point Predictive’s Frank McKenna teams up with Mary Ann Miller, of the identity verification platform Prove, and Karisse Hendrick, of Chargelytics Consulting, to discuss what they anticipate to be the upcoming year’s fraud trends. From tactics to targets, learn what some of the industry’s most prominent experts are thinking about as we enter 2024. 

1. ‘Inny’ Fraud Unveiled 

A surge in “Inny” perpetrated fraud — fraud perpetrated by or with the help of business insiders — will continue to propagate across various sectors, from banks to online retailers. Insiders recruited through social media platforms will play a pivotal role in executing sophisticated scams, exposing a hidden crisis in 2024. 

2. Scam Reimbursement Sparks First-Party Fraud Surge 

The UK’s move to reimburse APP scam victims sets the stage for a surge in fraud as scammers collaborate with account holders to file false claims. This consumer-friendly reimbursement system may be exploited, leading to a significant increase in first-party fraud incidents. 

3. Digital Doppelgangers, Ransom, and Extortion Rise 

The emergence of true multimodal AI cloning models will give rise to digital doppelgangers, enabling scammers to use cloned videos and voices for impersonation. Additionally, the prevalence of deepfakes and AI extortion is expected to increase, contributing to a new wave of sophisticated scams in 2024. 

4. Zombie Offices Reveal Commercial Real Estate Fraud 

A crisis in commercial real estate fraud is anticipated, mirroring the 2008 mortgage fraud crisis. Inflated income claims and collateral values may expose a significant financial downturn in the commercial real estate sector this year. 

5. Big Account Purge Takes Center Stage 

As a response to the aftermath of the pandemic, companies are expected to initiate a massive cleanup of their customer portfolios. The purge includes closing accounts linked to synthetics, fake accounts, money mules, and exploiters, with some institutions already taking proactive measures. 

6. Faulty KYC Faces Strain Amid Rising Attack Rates 

Traditional Know Your Customer (KYC) processes will be further strained in 2024 as fraudsters exploit vulnerabilities in the system. Accelerating data breaches, an influx of new fraudsters on social media, and outdated KYC tools will contribute to higher attack rates across various sectors. 

7. Crypto Crackdown Intensifies 

Regulators are predicted to enforce stricter legislation on the cryptocurrency ecosystem, targeting major players like Kraken, Binance, and Coinbase. The Securities and Exchange Commission (SEC) is expected to drive enforcement actions, potentially leading to a decline in the overall use of crypto in the US. 

8. Banks Tackle Check Fraud Pragmatically 

Amid soaring check fraud rates, banks are anticipated to adopt practical measures to counter this threat. Solutions include SMS text validation, name check payee using image analytics, and collaboration with technology providers to intercept check images from dark web sources. 

9. Social Media Accountability on the Horizon 

Regulations and mounting pressure from regulators will push social media platforms towards greater accountability. The Digital Services Act in Europe and The Inform Consumers Act in the US are expected to drive increased data verification tools and processes on two-sided marketplaces, while social media platforms may face takedowns. 

10. Fraudsters Target Supply Chain 

Supply chain attacks, facilitated by AI bots, will become a major force in fraudsters’ tactics, impacting e-commerce merchants and 3rd party system integrations between banks and fintechs. Collaboration and investment in robust defenses will be crucial for mitigating these evolving threats. 

11. Shapeshifting Scammers Adapt to New Challenges 

As law enforcement intensifies efforts against various scams, scammers are predicted to adapt and evolve. Migration of scam operations, more sophisticated victim-assisted scams, and a shift towards gift cards over crypto for anonymous transactions are anticipated trends in the scam landscape for 2024. 

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Disclaimer: The views expressed in Frank on Fraud are the personal perspectives of Mr. McKenna and do not necessarily represent the views of Point Predictive.