Account takeover fraud rising

April 22 — Account takeover fraud rising

ATO on the rise with statistic input from NuData Security.

Instead of merely stealing your credit card number, today’s fraudsters are moving to full-blown account takeover, partly to thwart EMV chip-card technology but mainly to maximize their return on investment.

Account takeover is a type of identity theft where a fraudster uses parts of the victim’s identity such as an email address to gain access to financial accounts, says Patrick Reemts, vice president of credit risk solutions at ID Analytics in San Diego. The perpetrator often reroutes communication about the account, keeping the victim in the dark so the thievery can continue longer. Affected accounts can include credit cards, checking and savings accounts, brokerage accounts and store loyalty rewards accounts, Reemts says.

This type of fraud has overtaken simpler types of credit card fraud, according to a data analysis released in August 2015 by NuData Security. An earlier NuData report revealed that incidents of account takeover jumped 112 percent in the first quarter of 2015 compared to the same time period in 2014.

“If you steal a credit card, you’ve stolen one relationship,” Reemts says. “With account takeover, you have the potential to access several relationships they have. You have a lot more data to use. The payoff is typically greater.”

Part of the reason for the increase in account takeover is the increasing adoption of EMV technology, which makes it more difficult for fraudsters to clone physical credit cards. As the United States catches up to the rest of the world in implementing EMV, criminals will turn to new techniques such as card-not-present theft and account takeover, Reemts says.

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