- Imposter scams accounted for one in five of the fraud reports made to the Federal Trade Commission in 2020.
- Digital life includes sharing more information across more channels, widening the opportunity for identity fraud.
- Companies must adopt new ways to verify identities and keep people, experiences, and assets safe.
Physical documents like driver’s licenses and passports used to be among the few things that could identify you other than your parents. But with people increasingly sharing personal details and leaving digital footprints on social media and online shopping sites — not to mention the advent of new technologies like machine learning and facial recognition — that has changed. According to the identity intelligence company AU10TIX, understanding the expanding identity landscape is key to protecting customer security and privacy and protecting brand reputation while saving your business money.
The research company Javelin reports that identity theft cost Americans $43 billion in 2020 — and it’s a widespread problem, with imposter scams accounting for 20% of online fraud reports to the Federal Trade Commission in 2020. Each day, people around the world suffer financial harm from scammers who steal their credit-card details and hijack their online accounts. The cost to businesses is immense, too, with a 2020 PwC report finding that fraud cost businesses $6.5 billion over the previous 24 months.
Identity fraud has more than negative economic effects. The American Institute of Certified Public Accountants puts the effects of identity fraud on senior citizens in the category of elder abuse. There have been instances of home-sharing hosts defrauded by guests who steal their things and run criminal operations from their properties. And we’ve all seen the stories of people being catfished on online dating sites and scammed out of their money — or worse. With identity thieves also targeting children at an alarming rate, hardening the approach to identity management is a pressing challenge.
Understanding identity literacy
One way to approach this is by expanding our understanding of identity — its opportunities and liabilities, according to AU10TIX CEO Carey O’Connor Kolaja. Just as we learned how to manage money effectively, we must learn how to manage our identities.
“This is the next critical life skill,” she said, pointing out how important digital identity has become in accessing and protecting resources. “It merits a concerted public effort.”
Individuals and businesses are learning that identity extends beyond what you might find on a government ID, she added. It covers every unique element — including nicknames, phone numbers, online account numbers, education credentials, and even transaction patterns. They can all help to identify people and infer things about them.
These identity elements factor increasingly in scenarios beyond banking or travel. The best companies are embracing contextualized identity intelligence to assess risk and threats without disrupting the way we access our social-media interactions, consult doctors over video calls, book cars via our mobile phones, and use our workplace resources. One example is how your bank can quickly identify possible fraud because of its knowledge of your spending habits.