Identity theft is not a joke, Jim

Remember the cricket World Cup where "Pak Bean," a notorious impersonator, pretended to be the real Mr. Bean? This hilarious stunt caused a media frenzy and left fans amused and confused. Or think about "McLovin" from Superbad, the teenager who managed to get a fake ID and cause all sorts of trouble. 

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While these examples are funny, identity impersonation is no laughing matter in the real world.

Identity theft is a type of criminal activity where malicious actors steal personal and other sensitive information and misuse them. Identity theft is also known as the gateway fraud since this act leads to a host of other malicious activities, such as mule accounts,  synthetic identities, account takeovers, etc.

This blog will explore the scale of the identity theft problem, how it happens, and what can be done to prevent it.

What is the scale of the identity theft problem? 

Size of the problem

In 2023, the FTC website received 1 million complaints of identity theft in the USA alone. These reports included more than 2.6 million related fraud cases, with more than $10.3 billion total losses. The global cost of identity theft is billions of dollars annually. 

You have to realize that the actual size will always remain an under-reported issue, considering that identity theft can be measured by itself. However, as a gateway fraud, the ripple effects branch out unpredictably and cannot be calculated definitively.

How does identity theft show up in different markets 

Identity theft is not confined to one specific market. It affects various industries, including banking, e-commerce, social media, and more. Each market faces unique challenges and threats related to identity fraud.

How are different regions affected by identity theft? 

Identity theft manifests as different types of fraud in various countries due to unique contextual conditions. 

For instance, in the United States, synthetic identity fraud is prevalent, driven by the availability of Social Security numbers on the dark web and a credit system that can be exploited by these fake identities. 

In contrast, Japan faces a rising threat from deepfake technology, used for sophisticated social engineering and corporate espionage, leveraging the high trust in digital interactions. 

In India, phishing and vishing attacks dominate, exploiting the rapid digitalization, low levels of digital literacy and sometimes lax cybersecurity measures. 

These variations highlight the importance of tailored strategies to address the specific types of identity theft prevalent in different regions, influenced by local technological, economic, and social factors. 

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What are common methods used by attackers to perform identity theft? 

Here is a tl;dr version!

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"I was tricked into sharing some of my account login credentials" a.k.a by manipulation 

1. Phishing: Fraudsters send fake emails or messages that appear to be from legitimate sources, tricking individuals into revealing their login information.
2. Fake Apps on WhatsApp: Receiving malicious apps via messaging platforms that steal personal information.
3. Phishing Links: Links that mimic legitimate websites, prompting users to enter sensitive information under the guise of necessary actions like re-KYC.
4. Vishing: Voice phishing, where fraudsters manipulate victims into sharing personal information over the phone.
5. Social Engineering: Manipulating individuals into divulging confidential information. Here are some of the most widely used social engineering tactics.
6. Self-Negligence: Sharing PINs, using simple passwords, or falling for scams like job offers or free credit cards.

 The image above shows how people with less experience might mistakenly enter their login details on a fake website, which could give criminals access to their real PayPal accounts.

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2. "A malware infection exposed sensitive information on my phone" a.k.a by compromising your device 

1. Application Side:
   • Classic Data Breaches: Unauthorized access to databases storing sensitive information.
   • Insider Collusion: Employees collaborating with external fraudsters.
   • Poor Security: Weak security measures allow breaches.
   • Man-in-the-Middle Attacks: Intercepting communications between two parties.
   • Vulnerabilities in Security Flow: Issues like hardcoded keys in apps.
   • Failure to Adhere to OWASP: Not following security standards.
   • Inadequate RASP Protections: Insufficient runtime application self-protection.
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2. From the device:
   • Malicious Activity on My Phone: Malware or remote takeover tools.

This is an example of ransomware known as WannaCry that hit around 75,000 systems around the world, crippling essential health services and police services! 

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3. "Someone pretended to be me and got in" a.k.a by impersonation 

1. Lax KYC Processes: Inadequate verification processes.some text
   • Example: In 2022, Indian NBFC Dhani's flawed KYC led to ruined credit scores for multiple people. Read the story here. 
2. Card: Fake photos on Officially Valid Documents (OVDs).some text
   • Example: Fraudsters can use a fake ID maker like ID creator.com 
3. Device: Lost or stolen devices.some text
   • First-Party Information: Personal data is available on platforms like Telegram.
   • Biometrics: Use of synthetic IDs or faces that can easily be created on AI platforms like thispersondoesnotexist.com 

This is a fake image generated by AI.

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What Can Be Done to Prevent Identity Theft?

Identity theft is a growing concern in our digitally connected world. Understanding how it happens is the first step to prevention. Here's a breakdown of common scenarios and potential solutions:

Here's how to protect yourself against manipulation:

• Solutions That Can Scan the Phone or SMS: Advanced software can analyze incoming messages and calls, flagging suspicious activity or phishing attempts. These tools can provide real-time alerts, helping you avoid falling victim to scams.
• Background Checks: Many services offer background checks on phone numbers, email addresses, or social media profiles. This can help verify the identity of someone trying to contact you, reducing the risk of interacting with scammers.
• Application Controls: Robust security measures within apps can help prevent unauthorized access. This includes features like multi-factor authentication, password strength requirements, and suspicious activity alerts.
• Awareness of Mules: It is crucial to understand the role of money mules—individuals unknowingly used to transfer stolen funds. Educate yourself about the tactics used to recruit mules and how to avoid becoming involved.

Here's how to protect yourself against device compromises:   

• Robust Cybersecurity: Implementing strong security measures, such as firewalls, intrusion detection systems, and encryption, is essential for businesses and individuals alike.
• Self-Protection: Adopting good security practices, like using complex passwords, enabling two-factor authentication, and regularly updating software, can significantly reduce the risk of hacking. No, your dog’s name is not good enough either. Here are some tips for good passwords.
• Awareness: Staying informed about the latest hacking threats and techniques can help you recognize and avoid potential attacks.
• Tracking Device Information: Monitoring device signals, such as IP addresses, location data, and device IDs, can help identify suspicious activity and potential breaches. 

Here's how to protect yourself against impersonation:

• Secure Your Biometrics and Data: It is crucial to protect sensitive information, such as fingerprints, facial recognition data, and personal documents. Refrain from sharing this information with untrusted parties.
• Avoid Unapproved App Marketplaces: Downloading apps only from reputable sources reduces the risk of installing malicious software.
• Keep Your Official Verification Documents (OVD) Updated and Safe: Regularly updating official documents and storing them securely helps prevent identity theft.
• Applications Should Use Gen AI Prevention Tools: Leveraging advanced artificial intelligence can help detect and prevent fraud by identifying user behavior and transaction anomalies.

How can Bureau offer 360° protection against identity theft fraud? 

With Bureau Device Intelligence, you’ll know which identities are trustworthy and which are bots, fraud rings, and bad actors. Leveraging a powerful Trust Network built on millions of processed data points, Bureau assesses risk based on connections between digital personas, physical identities, and behavior patterns, offering a deep understanding of individual users. 

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