An analysis of global customer data has highlighted a 20% increase in overall fraud incidents compared to last year, largely attributed to the surge in impersonation fraud and the accessibility of sophisticated attack methods and tools.

The gaming, payments and e-commerce sectors experienced significant fraud escalations of 48%, 54% and 40%, respectively, compared to 2022 data, challenging fraud detection in these industries, according to a Verrif report.

Identity fraud dominated 2023, representing approximately 6% of verification attempts, indicating a person’s attempt to impersonate another.

The company’s report noted that 85% of fraud cases involved impersonation, utilizing falsified documents or absences during verification.

The remaining 15% comprised document fraud (13%) and digital and physical man-in-the-middle (MITM) fraud (2%), involving coercive tactics to access accounts or execute transactions.

The report’s conclusion indicated fraud is an ongoing issue and a growing problem for businesses as well as consumers, with generative AI and deepfakes-as-a-service platforms posing new challenges in combatting fraud.

David Divitt, senior director of fraud prevention for Veriff, said those AI-based tools and platforms are creating new ways and opportunities for bad actors to commit fraud.

“Especially concerning is the ramp-up in sophistication of deepfake images, which has been so rapid; it’s not difficult to imagine a time in the near future when they will be so good that detecting them by examining them alone will be incredibly difficult,” he said.

Those tools and platforms have made it much easier to commit impersonation fraud, especially due to the ability to buy stolen credentials online.

“Together with the growing ability to generate deepfake biometrics with the help of generative AI tools, it makes this sort of fraud so much easier for the fraudster to commit,” he says.

Divitt noted the rise in attacks on financial services providers like banks, especially in scams, where the actual ID document holder is tricked into performing the identity verification session.

“Even more worrying is the presence of so many in-person scams and coercion, which means real people are being physically intimidated into performing these unwanted identity verification sessions,” he added.

He noted that impersonation fraud has become increasingly challenging due to the ability to gather or buy stolen credentials online in underground fraud markets.

“This means more people’s info is out there for illegal use,” Divitt warned.

Organizations can implement advanced AI-driven algorithms and machine learning models to analyze patterns, detect anomalies and swiftly identify potential instances of online fraud.

Each additional challenge a fraudster must overcome costs them time and money and reduces their return on investment—once a certain level of ROI has been reached, they will move on to easier targets.

“Bad actors are nothing if not inventive, so even if your fraud prevention measures appear to be working, you should always stay one step ahead,” Divitt pointed out. “Each additional strategy and tool you put in place adds more challenges for the fraudster to overcome.”

He noted that fraudsters can beat any preventative technique with pretty good results—but by taking two or more together businesses can make it much more expensive and time-consuming to get through.

“Businesses need to have good tools in place that they can use to adapt their strategies to fraud trends as they evolve dynamically,” he says.

As fraudsters adapt and exploit vulnerabilities continuously, organizations should look to design a layered defense.

“Layers mean that even as the landscape moves and fraudsters try new things, one or more layers will put enough challenge in front of a fraudster that they won’t be successful,” Divitt said.

It is essential, however, to enable data sharing and ensuring the company can benefit from a global intelligence network since fraudsters operate across borders and industries.

“This keeps them from being able to use the same attacks across multiple targets,” he said.