{"id":241838,"date":"2025-05-14T17:43:17","date_gmt":"2025-05-14T17:43:17","guid":{"rendered":"https:\/\/peraltafinancing.com\/accounting\/with-the-economy-going-down-friendly-fraud-is-up\/"},"modified":"2025-05-14T17:43:17","modified_gmt":"2025-05-14T17:43:17","slug":"with-the-economy-going-down-friendly-fraud-is-up","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=241838","title":{"rendered":"With the Economy Going Down, ‘Friendly’ Fraud is Up"},"content":{"rendered":"


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LexisNexis Risk Solutions has released its annual cybercrime report, dubbing it \u201cThe Calm Before the Storm?\u201d with the ominous question mark and all. The storm in this case being an impending AI-powered fraud assault.<\/p>\n

According to their report<\/a>, first-party fraud is now the most popular type of fraud globally, accounting for more than a third (36%) of all reported fraud in 2024, an increase of more than double from 15% in 2023.<\/p>\n

First-party fraud is, in their words<\/a>: \u201c[M]isrepresenting or giving false personal or account information for financial gain, such as when applying for a loan, claiming a credit or debit card purchase is fraudulent in order to get a refund (known as friendly fraud), or claiming ordered goods were not delivered. Buy Now, Pay Later (BNPL) providers and financial institutions are among the organizations reporting an uplift in first-party fraud, which is known to be exacerbated by periods of inflation and the rising cost of living. Increased institutional liability for scams, driven by regulation, is also likely having an impact.\u201d<\/p>\n

The press release notes that bot-based crimes are actually down by 15% but warns that this could be the calm before the storm (heh\u2026it\u2019s in the name of the report) as crime networks ready their AI fraud armies for attack.<\/p>\n

\u201cWe are at a potential tipping point. While many organizations have improved their defenses over the past few years, we also know that cybercriminals are embracing new innovative, AI-enhanced capabilities and we will likely see these extensively tested and executed over the coming months,\u201d said Stephen Topliss, vice president of fraud and identity, LexisNexis Risk Solutions. \u201cOur analysis of attacks over a longer multi-year period shows that significant attacks often come in waves and this latest set of figures could indicate the imminent arrival of the next, AI-enabled wave of global attacks.\u201d<\/p>\n

\u201cThese findings represent a notable shift in global fraud patterns, with consumers now emerging as the single largest source of human-initiated fraud,\u201d he added. \u201cThe change in composition of attacks presents a significant challenge for fraud prevention since detecting first party fraud requires a subtly different approach from detecting scams or account takeovers. Organizations can\u2019t afford to be complacent, however \u2013 there were more than three billion brute-force automated account takeover attacks detected last year alone and scams remain a global problem. It is vital for organizations to have models tuned to detect these varied forms of fraud.\u201d<\/p>\n

In a 2009 report titled \u201cOccupational Fraud: A Study of the Impact of an Economic Recession,\u201d the Association of Certified Fraud Examiners found a direct correlation between the dire state of the economy and fraud activity<\/a>. We sort of knew that, logically, since people get desperate when the economy is trash but it\u2019s nice to see it verified with data. This is what ACFE said in that report, just so we know what we might be dealing with should the economy take a nosedive in coming months:<\/p>\n