North America sees social engineering scams multiply by a factor of 10

Money laundering accounts increase 94%; GenAI tools and deepfake threats growing

NEW YORK, Nov. 13, 2024 /PRNewswire/ -- New research released today shows North American financial institutions fielded 10 times more reports of social engineering scams in 2024 than they did a year ago. The data shows scams now represent 23% of all digital banking fraud. BioCatch – the global leader in digital fraud detection and financial crime prevention powered by behavioral biometric intelligence – published these findings in its 2024 Digital Banking Fraud Trends in North America report, which also details a staggering 94% uptick in reported money mule (or money laundering) accounts.

"Reports of North American mule accounts have almost doubled in the last year," BioCatch Director of Global Fraud Intelligence Tom Peacock said. "This not only hints at the massive scope and scale of the money mule problem plaguing the world's financial institutions but also – more hopefully – the positive steps North American banks have taken in the last year to identify these laundering accounts."

BioCatch's new report also highlights the growing threats posed by GenAI tools and deepfakes, which in the hands of fraudsters allow them to launch a greater quantity of more sophisticated attacks that are more difficult to detect and prevent.

"As we outlined in our 2024 AI, Fraud, and Financial Crime Survey and ScamGPT white paper, artificial intelligence is super-charging fraud," BioCatch Global Advisory Director Seth Ruden said, "compounding its impact, and allowing bad actors to scale and sophisticate their scams with deepfakes and other devices. As the industry deploys the newest authentication methods in both account opening and account takeover processes, fraudsters will undoubtedly attack these as well."

Other key report findings:

• A win for banks: Account-opening fraud declined by nearly 60% in the last year, as banks implemented additional controls, such as behavioral biometric intelligence.
  
  
• hony checks and balances: Check and deposit fraud volumes tripled in the last year. As banks have made it more difficult for fraudsters to create new accounts, these bad actors have changed their tactics, devoting more attention to deposit fraud on existing accounts.
  
  
• Cut-and-paste red flags: BioCatch saw the copying and pasting of login credentials in nearly 30% of all fraud cases and in less than 1% of legitimate banking sessions.
  
  
• Device intel insufficient: Nearly a quarter of all unauthorized fraud in North America takes place on trusted devices.

The massive uptick in reported scams also presents another challenge for banks on the customer service front. The Emotional Undercurrent of Scams, a study conducted by Javelin Strategy & Research and sponsored by BioCatch, highlights the human side of fraud and the devastating impact on scam victims following an attack.

"More than half of those surveyed said they'd lost trust in people and suffered emotional stress after falling victim to a scam," Javelin Strategy & Research Senior Analyst Suzanne Sando said. "Nearly one in five victims said their loss disrupted their family life. As these scams grow more prevalent and sophisticated, a data-driven approach that combines historical account data as well as behavioral and device intelligence is critical to stopping scams in real-time and saving victims and banks from significant losses."

Click here to access BioCatch's complete 2024 Digital Banking Fraud Trends in North America report.

About BioCatch:

BioCatch stands at the forefront of digital fraud detection, pioneering behavioral biometric intelligence grounded in advanced cognitive science and machine learning. BioCatch analyzes thousands of user interactions to support a digital banking environment where identity, trust, and ease coexist. Today, 34 of the world's largest 100 banks and 237 total financial institutions rely on BioCatch Connect™ to combat fraud, facilitate digital transformation, and grow customer relationships. BioCatch's Client Innovation Board – an industry-led initiative featuring American Express, Barclays, Citi Ventures, HSBC, and National Australia Bank – collaborates to pioneer creative and innovative ways to leverage customer relationships for fraud prevention. With more than a decade of data analysis, 93 registered patents, and unmatched expertise, BioCatch continues to lead innovation to address future challenges. For more information, please visit www.biocatch.com.

PR contact:

Mac King
BioCatch senior comms manager
Mac.King@BioCatch.com

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