There is a new victim of identity theft every two seconds. Identity theft can have expensive and life altering consequences for today’s consumer. Depending on the type of theft that occurs, consumers can be left feeling violated, anxious, and unsafe. Additionally, it can take years to undo the financial ramifications associated with identity theft. As business leaders, it is of upmost importance that the consumer feels protected against the possibility of identity theft. The Identity Theft Resource Center reports that there were 1,291 breaches in the first three quarters of 2021. In the first two quarters of the year, it looked as though the number of victims were going down, but it dramatically rose in the third quarter. As the fourth quarter ends, businesses should begin adopting secure authentication methods that prevent identity fraud rates from continuing in the following year.  

The United States identity crisis

On average, according to Experian, 1 in 20 Americans are victims of identity theft every year. In 2019, 13 million American consumers were affected, resulting in a total fraud loss of an estimated $17 billion. Unfortunately, there has been a 53% increase in identity theft from 2019 to 2020 and fraud numbers continue to rise:  

  • Consumers filed 2.2 million fraud reports in 2020. 
  • 47% of Americans experienced financial identity theft in 2020. 
  • 9 in 10 Americans encountered a fraud attempt in the past year. 
  • 33 million (1 in 6) Americans lost money to identity theft last year. 
  • Consumers lost more than $56 billion to identity theft and fraud in 2020 

The COVID-19 pandemic had a huge impact on fraud and identity theft. During these unprecedented times, there was an uptick in fraud related calls, letters and emails from scammers posing as the IRS. As a result, consumers have reported a losing more than $588 million to COVID related fraud since the beginning of 2020 according to the Federal Trade Commission. Despite knowing the risk of identity theft online, a recent Experian survey found that 33% of consumers reported doing more online shopping during than pandemic than ever before.  Consequently, online shopping accounted for the largest number of reported scams to the FTC – more than 53,000 complaints or about 17% of total reported fraud.  

A March 2021 TransUnion analysis showed that 36% of consumers who said they are being targeted by digital fraud related to COVID-19 in the last three months is higher than approximately one year ago. In April 2020, 29% said they had been targeted by digital fraud related to COVID-19. In the U.S., this percentage increased from 26% to 38% in the same timeframe. These staggering numbers and occurrences call for a dramatic change in how businesses provide secure authentication and identity proofing methods for their consumers.  

The treatment for the identity crisis

A recent report from Onfido’s 2022 Identity Fraud Report found that selfie-based biometric authentication is highly effective against identity fraud. According to Onfido, the average document fraud rate over the first nine months of 2021 was 5.9%, whereas the fraud rate for selfie-based identification systems was only 1.53%. Video selfies, meanwhile, brought the fraud rate down to just 0.17%.  

Selfie based identification or facial recognition is becoming vastly popular amongst consumer products. Facial recognition technology applies the science of biometrics to a user’s facial features. Facial recognition algorithms create a biometric template by detecting and measuring various characteristics, or feature points, of human faces, including location of the eyes, eyebrows, nose, mouth, chin, and ears. Two templates are compared to yield a match score, which indicates the likelihood that the two images belong to the same person. Liveness detection may also be applied to ensure that the source of the biometric sample is not a digital or paper reproduction. 

40% of consumers are very concerned about the security of online accounts they use every day

The June 2021 Selfie ID Report found that facial recognition helps ease consumers’ data security concerns. 40% of consumers are very concerned about the security of online accounts they use every day, especially when it comes to e-commerce and social media. As a result, consumers are more interested and willing than ever to present government IDs or selfies to verify their identities and secure their digital accounts, as 37% of consumers would be willing to verify their identities with selfies if doing so enhanced their data security. 

Facial recognition to reduce staggering identity theft rates

The increase in identity theft and the billions of consumer dollars lost is alarming and calls for secure authentication and identity proofing methods. Facial recognition has been successful at reducing data breaches and fraud. Streamlining facial recognition into current authentication methods is easier than ever with today’s generation of mobile products.  It is imperative that businesses mitigate the increasing fraud and identity theft rates by bolstering current security methods.   

For businesses looking to reduce their risk of fraud and increase consumer trust, Aware’s Knomi® mobile biometric authentication framework is a robust choice. Knomi uses mobile devices to conduct biometric enrollment and authentication with a simple selfie. Its advanced security checks can authentication driver’s licenses and passports and uses leading liveness detection to ensure spoof-resistant biometric facial matching between live and printed images.  

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