Top Fraud Trends for 2024 & How to Prevent Them

1. AIT Accelerates A2P Fraud

Application-to-Person (A2P) messaging has become a valuable digital channel, enabling businesses to send notifications, marketing messages, and shipping updates to customers. It's also a popular channel for two-factor authentication (2FA), enabling app users to confirm their identity via SMS.

Unfortunately, fraudsters are taking advantage of A2P messaging. The most common types of A2P fraud include:

• Grey route fraud: Fraudsters route unauthorized A2P messages through channels originally designated for Person-to-Person messaging.
• SMS phishing scams: Fraudsters send A2P messages that appear to come from a legitimate source but contain a link or phone number that leads to a phishing site.
• Artificial inflation of traffic (AIT): Fraudsters generate high volumes of traffic to fake accounts, creating a large bill for enterprises whose customers never receive the SMS messages.

AIT is among the fastest-growing fraud trends and a major A2P threat for enterprises. More than 43 percent of businesses have experienced AIT in recent years, and 60 percent of business leaders say the threat is accelerating.

The best way for businesses to avoid AIT scams is to use a reliable communication platform with robust fraud prevention tools. For example, Vonage offers Verify API, which enables you to require 2FA for all A2P messages that contain sensitive information. In addition, Fraud Defender enables you to monitor A2P message traffic in real-time to identify and address signs of fraudulent activity, such as sudden spikes or unusual message content.

2. Toll Fraud Rises Due to Increased Adoption of Cloud Communications

Cloud communications offer businesses many advantages, from lowering costs and enabling remote work to accelerating integrations that can boost productivity and improve the customer experience. Without adequate security, however, the technology can introduce new vulnerabilities, such as toll fraud.

Toll fraud occurs when an unauthorized user accesses your phone system and generates high-volume calls to premium international numbers. Fraudsters then get a cut of the revenue these illicit businesses generate from your calls.

Toll fraud is the leading type of fraud committed. It accounts for several billion dollars in losses today and is expected to grow, considering the steep rise in Voice over Internet Protocol adoption over the past few years.

Without real-time monitoring, you might not know you've been a victim of toll fraud until your phone bill arrives. Vonage Protection Suite includes Fraud Defender monitoring tools and the Number Insight API, which provides up-to-date fraud assessment data for international phone numbers. Using these tools, you can spot suspicious calls in real-time and automatically block calls to phone numbers associated with fraudulent activity.

3. Synthetic Identities Complicate Account Takeover

Account takeover (ATO) has been on the rise for years, thanks in large part to sophisticated phishing attacks and large-scale data breaches that have resulted in millions of consumers' personal information and passwords being exposed on the dark web. Hackers and fraudsters use this information to take over accounts and access users' bank accounts and credit card information. In 2022, ATO fraud comprised more than one-third of all fraudulent activity reported to the FTC.

ATO is also being fueled by another major trend: synthetic identity fraud, wherein fraudsters use personal information from several different people to create brand-new synthetic identities. This type of fraud is harder to detect, so it is a fast-growing trend.

Multi-factor verification is more important than ever. With Vonage Verify API, you can implement 2FA across multiple channels using failover workflows and built-in anti-fraud capabilities.

4. Phone Scammers Get Social and Go Global

Phone scammers have a new bag of tricks, including using synthetic identities to trick people into believing their calls are coming from reputable organizations or known individuals — they try to convince you by using empathy and creating a sense of urgency or fear. They're also deploying social engineering tactics — sophisticated psychological attacks designed to manipulate their victims' emotions and gain unauthorized access to sensitive information.

Phone scammers are expanding their geographical boundaries, too, using local-number telecom technology (meant to help global businesses connect with customers around the world) to spoof phone numbers in different countries, reaching more people while being untraceable.

AI-enhanced surveillance tools enable businesses to identify and block phone numbers associated with suspicious or fraudulent activity. For example, Vonage Number Insight API provides real-time fraud assessment data for international phone numbers and lets you set rules about how to handle incoming calls.

5. Fraudsters Become (Artificially) Intelligent

Machine learning, generative AI, predictive analytics, and other intelligent solutions are making businesses faster and smarter. Unfortunately, fraudsters also have access to many of these tools, and they're putting them to work.

For instance, ChatGPT is helping scammers create phishing emails that sound every bit as professional as legitimate businesses. Criminals with no coding experience can suddenly become hackers by using ChatGPT to generate functional malware.

While you can't stop bad actors from leveraging these tools, you can take steps to prevent your employees from falling for them and unknowingly giving hackers access to your data — using a combination of clearly communicated security protocols and monitoring software. For example, Vonage Audit API enables you to shore up vulnerabilities by proactively investigating account events within your Vonage system and providing comprehensive event logging.

Fighting Fire with Fire: Technology for Fraud Prevention

Between the steep rise in digital consumerism and cloud computing and exponential tech innovation, cybercriminals now have the means and opportunities they need to launch sophisticated and highly effective attacks against businesses and individuals alike.

The good news is the same AI-enhanced technology that makes fraudsters more dangerous can also make businesses more secure. And leading communications providers like Vonage are committed to making cybersecurity stronger than ever now, going into 2024, and beyond.

To get started with fraud prevention and AI-enabled, real-time monitoring solutions, explore Vonage Protection Suite today.