Five key takeaways from the Veriff Fraud Report 2024

1. Fraud is here to stay

Sadly, fraud is an ongoing problem and a growing problem. Veriff’s data shows that 6% of all verification attempts were fraudulent in 2023 and at 20%: The rise in overall fraud year-on-year since our 2023 Fraud Report. 

Diving into that number, we found that there are certain industries where the fraud rate is growing at an alarming rate, with eCommerce, payments, and video gaming platforms the worst hit.

eCommerce saw a 40% increase in net fraud compared to 2022 (from 12.4% to 17.4%), payments went from 4.07% net fraud rate in 2022 to 6.28% in 2023 - a 54% increase, video gaming platforms saw a 47% rise compared to 2022, and mobility platforms saw a 19% rise in Net Fraud compared to 2022.

2. Identity fraud is still the major threat

Identity fraud is the biggest scourge for our customers, averaging about 6.03% of all attempted transactions over the course of the year. Within this broad category, the most common type of fraud is impersonation fraud. This comprised 85% of all fraud in 2023, with nearly 10% of all attempted verifications in the year actually being impersonation fraud attempts. 

Impersonation is a complex danger, ranging from synthetic IDs to the initiation of a verification process with someone else’s document. However, it’s not the only type of identity fraud that should concern online businesses. Document fraud – which can see physical alterations to a document or the creation of a counterfeit document – took up more than 1% of all attempted verifications in 2023.

3. The growth of authorized fraud

These are scams where a user is deceived into authorizing a transaction: for example, the fraudster might pretend to represent your financial institution to trick you into making a verification attempt. 

It saw a dramatic – and worrying – rise over the course of the year, with a 40% expansion in the fourth quarter. In total, it made up about 1.15% of attempted verifications. Common examples include elderly people being tricked into sharing financial information to remove a virus from their computer, for instance.

4. A complex, evolving danger

Of course, there are many different types of online businesses and organizations, operating in different regions across the world. These differences can lead to substantial differences in the nature of the fraud threat – and the form it takes. 

For example, the threats depend on the geographical region in question. For example, over 80% of fraud in Latin America is committed using ID cards. By contrast, in North America, drivers’ licenses are a far greater target, representing nearly 67% of fraud committed using ID cards. 

These differences break down further when we look at specific sectors in certain regions. For example, while passports are disproportionately deployed to commit fraud in e-commerce across all three of the regions we focused on, drivers’ licenses were a particular target in communities/gaming in North America.

5. The fraud prevention ecosystem approach

What does this all mean? Fundamentally, it is impossible to adopt a one-size-fits-all approach or to imagine that a growing company can deploy just one tool to tackle every type of fraud it faces across a complex global and sectoral landscape. 

At Veriff, we deploy an ecosystem of tools to meet a complex, evolving threat. Our new fraud mitigation products – Fraud Protect and Fraud Intelligence – are designed to address the demands of different sectors, enhancing detection of advanced fraud and providing unrivaled access to fraud insights and expertise. 

We offer AI-based technology, biometrics, and an unrivaled database of more than 11,400 document types. With these resources, we can ensure you keep your clients safe and secure, providing them with a convenient onboarding process and protecting your reputation.