AU10TIX Releases Q4 Global Identity Fraud Report Reveals Eight-Month AI-Based “Mega Attack”

TEL AVIV, Israel, March 12, 2024 – AU10TIX today released its Q4 Global Identity Fraud Report. With insights from millions of transactions processed in 249 countries from October to December 2023, the report uncovers significant trends in large-scale organized identity fraud. This special edition of AU10TIX’s recurring report extends beyond Q4 to reveal an eight-month coordinated identity fraud “mega-attack” for the first time. Between May and December 2023, organized criminals carried out 22,080 fraudulent boarding attempts using AI-generated variations of a single passport.

AU10TIX researchers subsequently identified two never-before-seen distinct patterns of “mega” identity fraud attacks, which they categorized as ‘sudden burst’ and ‘slow burn’. The sudden burst is represented by the mega-attack which involved 22,080 attacks, half of which occurred over a short period of 2-3 weeks. The slow burn refers to the average mega-attack, which involves using around 2000 AI-generated IDs 5-6 times a day over a long duration, usually 12 months. The company detected more than ten slow fire attacks in 2023.

Payments and cryptocurrency were the most targeted sectors in these mega-attacks, but in a surprising development, attacks on the social media sector increased by more than 21%. Data suggests that this trend may be linked to organized crime groups seeking to establish social credibility for fake accounts, which will later be used for money laundering and terrorist financing activities.

“We detected these mega-attacks by cross-referencing anonymous ID data against AU10TIX’s consortium of 60+ top organizations, demonstrating the power of collective expertise in identifying complex fraud patterns that individual entities can evade,” said Dan Yerushalmi, CEO of AU10TIX. . “Sophisticated AI and deep-fake technology are helping organized crime groups escalate their attack numbers exponentially, but we will continue to work to make the world a safer and more secure place.”

Key K4 trends

BitCoin value boom has led to increased cryptocurrency attacks

In Q3, AU10TIX reported a shift in attacks from the cryptocurrency sector to the payments industry, likely in response to the EU’s Markets in Crypto Assets (MiCA) regulations, which strictly enforce Know-Your-Customer (KYC), Know- your-business requires (KYB) and Anti-Money Laundering (AML) screening for trading platforms. Although this trend continued in Q4, it was affected by the rising value of Bitcoin throughout the quarter, which attracted both legitimate traders and scammers. As a result, the percentage of global attacks targeting the cryptocurrency sector rose from 23% to 32%. Still, this remained well below the 47% increase from Q2.

North America and APAC have seen the most attacks in the cryptocurrency sector

Even within the cryptocurrency sector, divergent trends have been exhibited across regions. In Europe, the implementation of MiCA was impactful, resulting in no increase in attacks despite the jump in Bitcoin value. However, North America and APAC lack such regulations and have therefore experienced increased activity as fraudsters have attempted to exploit the Bitcoin frenzy and remain undetected in the flood of commerce. As a result, identity fraud in the payments sector in North America dropped by 30% as some fraudsters returned their focus to cryptocurrency.

Payments top list as the most targeted industry

The payments sector remained responsible for nearly half of all global Q4 fraud attempts. This industry does not have a widespread and globally accepted regulatory framework, so it is crucial that payment organizations strengthen their security protocols to protect consumers from fraudulent transactions.

AU10TIX offers four actionable insights to help organizations protect against identity fraud:

Selfie-based biometrics have been proven effective in preventing fake account boarding Robust KYB, KYC and AML screening are essential to protect a business’ reputation Consortium validation increases privacy and increases fraud detection Be aware that fraudsters use social media platforms used to establish fake ID credibility

About AU10TIX

AU10TIX plays a crucial role in establishing trust between individuals/companies and digital systems. Founded in 2002, it is the global leader in identity verification and management, protecting the world’s biggest brands against advanced fraud. The company’s future-proof product portfolio helps businesses provide frictionless customer onboarding and authentication in 4-8 seconds while staying ahead of emerging threats and evolving regulatory requirements. AU10TIX offers the world’s only 100% automated global identity management system, as well as the industry’s only solution that can detect organized mass attacks by analyzing traffic patterns and cross-referencing data across a consortium of over 60 major companies. With its deep roots in airport security, AU10TIX has verified billions of identities. AU10TIX is a subsidiary of ICTS International NV (OTCQB: ICTSF). Connect with AU10TIX on LinkedIn and on X at @AU10TIXLimited. For more information, visit AU10TIX.com.

Source: AU10TIX