A recent report by Experian says that identity frauds and market alert frauds have increased significantly in the credit system in the past year
Fraudsters can simply hover the skimming device around your pocket and commit a credit card fraud
As the Indian economy is progressing towards increased digitization, the number of frauds in the financial services sector, predominantly within the credit system, is also rising. According to a recent report titled Experian India Fraud Report 2018-19 by Experian Services India Pvt. Ltd, a credit information services company, identity frauds and market alert frauds (MAF) were the leading contributors in the overall fraud distribution in the credit system in the past year. In the Asia-Pacific region, losses due to online frauds rose by about 50% for the surveyed businesses. The report said that more than 50% businesses in the Asia-Pacific region are now implementing active authentication to curb the number of frauds.
MAF is a way to steal sensitive information about a person. A certain communication is sent out to customers which makes them fill forms and reveal confidential information such as the 12-digit unique identification for Aadhaar. This information is then used to take over the identity of the person. “The stolen documents are used to create credit card applications. When the applications are sent out to the companies, their verification teams try to validate this information. When the information is not validated, the card applications get rejected," said Rajendra Kulkarni, head of education, Indiaforensic.com, a company engaged in the prevention, detection, and investigation of frauds. Identity theft, also known as synthetic fraud, is done by manipulating a person’s credit history by combining it with bogus information such as a fake address and mobile number. This is done to prevent the real customer from getting alerted.
Of the overall frauds, identity thefts made for 28% and MAF made for another 28%, followed by fraud contact information at 25% and fabrication of documents at 10%. “The data stored on servers is always vulnerable to hacking attacks. The confidential KYC data when stolen helps the criminals to take over the identities. You may get an alert that your insurance policy is about to expire and somebody may ask you to fill out certain forms or send an SMS to predefined numbers. These forms are simply used to collect your primary information," said Kulkarni. As more and more people start using technology, the opportunity for identity theft and market alert frauds also increases.