A new report has shown that while fraud attempts are still highest in the Payments sector, Gaming has become a new hotspot for potential fraudsters.
The Q1 2024 Global Identity Fraud Report, published by AU10TIX, highlights the emergence of online gaming as a target for identity fraud, appearing for the first time with 5% of the market share.
With the global online gaming market generating $26 billion annually, the report reveals ‘bonus abuse’ as a growing threat in this sector, accounting for up to 50% of fraud. Bonus abuse, often referred to in the context of online gaming or gambling, is the practice in which individuals exploit promotional offers intended for new users and provided by platforms to gain unfair advantages or profits.
Elsewhere, fraud attempts against the Payments sector exceed those in all industries, accounting for a huge 62% of the market share, while, in second place Crypto has returned to its pre-Bitcoin price drop proportions of 24%.
According to the report’s researchers, the share of attempted fraud in the gaming sector should drop once more platforms comply and implement robust IDV with KYC and age verification solutions.
Their tone is slightly less optimistic when it comes to the payments sector, warning that “until this sector is regulated we expect to see this trend increase.”
They have urged payment providers to “consider self-regulating their KYC, KYB, and AML protocols, particularly in the absence of stringent regulations.”
Dan Yerushalmi, CEO, AU10TIX added: “In 2024, the ID verification (IDV) industry is at a pivotal crossroads. Increased digital traffic, rising fraud, new digital IDs, the race to digital wallets, deepfakes, and intensified regulations are converging, necessitating innovative solutions and advanced technologies.
“Identity fraud has morphed into an AI vs. AI battleground, where sophisticated AI-driven fraud attempts are countered by equally advanced AI detection systems. In this dynamic environment, a multi-layered defense system is the only solution. Without it, only amateur fraud is detected, leaving organizations vulnerable to sophisticated attacks.“
