FICO has released a set of tips for consumers that want to guard against fraud during the upcoming holiday season. The organization noted that fraud rates have gone up dramatically since the onset of COVID-19, with cybercriminals hustling to take advantage of the pandemic and the subsequent increase in digital activity.
As it stands, the FTC has already fielded more than 130,000 fraud reports during the pandemic, which corresponds to $182 million in consumer losses. The story is similar in the UK, where UK Finance has reported £27 million in fraud losses on online marketplaces in the first half of 2020.
FICO believes that that trend will continue in the next few months, citing a Pitney Bowes survey that indicated that 57 percent of consumers plan to do more shopping online. Meanwhile, 45 percent are already making half of their purchases digitally, a figure that is three times as high as it was before the pandemic. That activity has led to much higher rates of new account fraud, identity theft, and other forms of payment fraud.
That’s why FICO is urging consumers to take certain precautions. Most notably, the organization emphasizes the importance of good password hygiene, and advises consumers to create a unique (and long) password for each account. It also encourages them to use two-factor authentication whenever possible, whether that involves a one-time passcode or passwordless device biometrics.
FICO then advises consumers to stick to trusted payment apps, and to send a small test payment (it could be as little as $1) to confirm the money is going to the right place before completing the rest of the transaction. People should be similarly wary of scams (even when making charitable donations), and should regularly check their credit reports to watch for any signs of suspicious activity.
“When it comes to financial fraud, banks are on your side,” said FICO Fraud and Financial Crime VP Liz Lasher. “However, prevention is critical, because the clean-up can be quite difficult and messy, and recovering stolen funds can be a tedious, months-long process.”
FICO’s warning echoes that of BioCatch, which has forecasted higher rates of new account fraud during the holiday season. The organization has found growing support for the use of biometric technology in a series of Consumer Digital Banking Surveys.