2016 Has the Markings of a Perfect Storm for Fraud

 
 
By Karen A. Frenkel  |  Posted 01-28-2016 Email
 
 
 
 
 
 
 
 
 
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    2016 Has the Markings of a Perfect Storm for Fraud
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    2016 Has the Markings of a Perfect Storm for Fraud

    Mobile apps are up against advanced adversaries, and the growth of e-commerce functionality added to social media has attracted the attention of cyber-criminals.
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    Social and E-Commerce Will Blend
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    Social and E-Commerce Will Blend

    To help monetize their user bases and increase stickiness, social networking sites like Pinterest, Facebook and Twitter plan to add "buy" buttons to their platforms. Adding e-commerce functionality to social media will continue in 2016, but it will attract fraudsters.
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    Recommendation
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    Recommendation

    If you have a social property with e-commerce features, consider adding security that can detect both social fraud (fake likes, fake reviews and spam) and financial fraud (for transactions, identity theft and promotion abuse).
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    EMV Cards and Digital Wallets
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    EMV Cards and Digital Wallets

    Card-Not-Present fraud will grow from $10 billion in 2014 to $19 billion in 2018, spurred by the increasing adoption of EMV cards and new digital wallet solutions. These technologies are expected to reduce point-of-sale system fraud and counterfeit credit cards, but fraudsters will monetize fake and stolen credit cards online anyway.
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    A Perfect Fraud Storm
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    A Perfect Fraud Storm

    Three trends will power a perfect storm resulting in high levels of fraudulent transactions: Significant increase in e-commerce websites and mobile apps. Increased comfort among consumers to purchase online. Adoption of EMV cards and digital wallets
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    Global Online-to-Offline War
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    Global Online-to-Offline War

    This year online-to-offline (O2O) companies, like Uber and Didi, invested billions to attract new drivers and users through promotions. That is leading to massive user acquisition fraud—drivers make money on subsidies by registering multiple accounts and conducting fake rides.
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    Recommendation

    As O2O companies consider global expansion, they should incorporate online fraud detection in their plans so that they can grow fast without being fleeced.
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    Account Takeovers to Rise
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    Account Takeovers to Rise

    Cyber-criminals will try to monetize stolen user credentials and credit cards via fraudulent credit card attacks in 2016. Worse, they could launch account takeover campaigns and identity theft to drain bank accounts and buy fake goods.
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    Recommendation

    Online merchants and consumers should be on high alert for anomalous purchases and account takeover activity to try to prevent breaches rather than react to them.
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    Cyber-Attackers to Move to Cloud
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    Cyber-Attackers to Move to Cloud

    As cloud services become more pervasive and cost-effective, cyber-attacks will move to the cloud. Fraudsters are already registering huge numbers of free trial accounts and use their computation infrastructure to conduct attacks.
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    Dedicated/Virtual Hosting Also Vulnerable
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    Dedicated/Virtual Hosting Also Vulnerable

    Dedicated/virtual hosting and anonymous proxies will come increasingly common among cyber-criminals.
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    Why the Cloud Appeals to Cyber-Criminals
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    Why the Cloud Appeals to Cyber-Criminals

    The cloud enables cyber-attackers to significantly increase their attacks because of their elasticity and compute capacity. The cloud also allows fraudsters to easily hide behind legitimate network sources and remain anonymous.
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    Recommendation
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    Recommendation

    To protect yourself, go beyond simple IP reputation databases and rules/model space systems to detect attacks. The industry needs more advanced solutions that precisely distinguish malicious traffic emitted from the cloud.
 

This year, cyber-criminals are expected to continue to outsmart traditional security defenses. They will leverage the latest mobile hacker tools to impersonate legitimate users and take control of consumer accounts en masse, according to a blog outlining the top five online predictions by fraud and cyber-security firm DataVisor. "As mobile apps and Web services continue to increase in number and functionality, they remain an attractive target for fraudsters," according to DataVisor. "Meanwhile, cyber-attackers have continued to adapt to evade traditional security defenses—using the latest mobile hacker tools and cloud technology to impersonate legitimate users." Consumer-facing Web and mobile apps are up against a much more pervasive and advanced adversaries than ever before. DataVisor predicts the following trends and offers some recommendations to protect against the cyber fraud onslaught.

 
 
 
 
 
Karen A. Frenkel writes about technology and innovation and lives in New York City.

 
 
 
 
 
 

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