As the coronavirus continues to disrupt life around the world, consumers are leaning harder than ever on ecommerce for day-to-day essentials. As they do, however, more and more of their personal information is shared online. As a result, individuals have become further exposed to the possibility of identity theft. Fortunately, by harnessing unique biometric identifiers to create verified digital identities that consumers can use online, identity fraud can be stopped in its tracks, with the additional benefit of leveraging self sovereign identity technology to enable consumers to reclaim ownership and control of their personal data.
Fraud is an unavoidable symptom of the coronavirus, and one that looks to become a permanent fixture in the new normal. According to insights from consumer reporting agency Experian, fraud has increased 33% in the UK alone since April, with fraudulent credit card applications cited as one of the main infractions.
On a broader scale, phishing attacks, a method in which bad actors dupe victims into conveying personal information, increased 600% worldwide in the first quarter of 2020. Phishing activities often serve as a prelude to credit card fraud, with assailants stealing identification to then use within a fraudulent application.
Alastair Johnson is Founder and CEO of Nuggets
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Data leaks and hacks are also on the rise. Last weekend, data belonging to 142 million guests of MGM Grand appeared online following a hack. With the personal information of millions up for sale on darknet markets, victims face the very real possibility of identity theft.
It isn't just individuals being targeted either, retailers have also experienced their fair share of deception. Scams range from an uptick in targeted phishing activities with stolen credentials issued into the eCommerce payments chain to "friendly fraud," which now accounts for 60-80% of chargebacks. Friendly fraud tends to increase in times of economic crisis. With people short of money and unable to pay bills, they turn to drastic measures such as deceptively claiming money back on purchased goods via credit cards.
The power of self-sovereign data
Identity theft isn't anything new, of course. Even before the coronavirus, fraud statistics were scaling at pace. Per an FTC report, consumers reported losing more than $1.9 billion In 2019, due to fraud—a $293 million advance on the year prior.
And it's perhaps no wonder. As our data becomes ubiquitously tied to everything we do, identity thieves have more attack vectors than ever. And, to make matters worse, their techniques are becoming more sophisticated.
Per Javelin's 2020 Identity Fraud Report, criminals are adapting to new technology devised to mitigate identity theft risk, faster than consumers are adopting it. Fortunately, beyond the exploitable SMS-based two-factor-verification techniques, or dependence on enterprise-based legacy security systems, technology is quickly raising the bar.
Verified digital IDs will soon become the standard for individuals and businesses alike, outmoding passwords, and other lackluster forms of authentication. Moreover, by linking to payment and interweaving the ideals of self-sovereign identity and decentralization, digital IDs can render ultimate control to the individual—leaving identity fraud in the past.
The importance of self-sovereign data and decentralization shouldn't be undermined. Consumer concerns are mounting when it comes to data handling. In a recent survey undertaken by market researchers Opinium, 77% of respondents felt uneasy about multiple platforms holding personally identifiable information such as date of birth or their mother's maiden name. And with ransomware attacks up some 900% this year, and bad actors specifically targeting enterprise networks and their data, it's perhaps no surprise.
While leveraging anomaly and malware detection can go a long way in mitigating attack vectors, these techniques don't entirely target the issue at the root. Instead, we should be looking inward at how we, as individuals, can avoid becoming victims of fraud. Ironically, we can do so by quite literally looking inward—and harnessing our DNA.
Facing up to identity fraud
Biometrically validated personal IDs underlined by blockchain technology are the next logical step forward in fighting fraud.
By leaning on biometrics—something as simple as a fingerprint or face scan—we can bypass the need to provide passwords or detailed personally identifiable information to third parties and enhance our data security. And by storing any personal identity via an immutable, encryptable, and decentralized blockchain, we can both validate and secure data so it can be easily deployed while minimizing attack vectors. Tie this all together with payment, and you get an impregnable verified digital ID which you—and nobody else but you—controls.
Those stomach-churning instances where you've forgotten your password, or even mislaid your ID will become a mere memory. Instead, your ID and critical personal data follow you wherever you go—because, essentially, it is you.
The brilliance of this method is, no one, besides the owner, can use a biometrically verified ID. This means that any potential for fraud is eliminated, and privacy remains preserved.
Digital identities, verified by biometric authentication, can protect people from many of the scams related to COVID-19, ultimately putting an end to identity theft and enabling individuals to become more vigilant in protecting their private data.
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