New data showing the impact of the COVID-19 crisis on online fraud in the first quarter of 2020 shows that 26.5% of all transactions were fraud and abuse attempts, which is a 20% increase over the previous quarter. And with new fraud campaigns driven by automation, there has been a sharp decline in human-driven attacks originating from low-cost “sweatshop” resources.
Arkose Labs researchers said this was the highest attack rate ever seen, as consumer behavior is in flux and digital transactions are on the rise.
“Organized fraud operations have been quick to mobilize, targeting spikes in digital activity,” researchers said.
The United States came out as the top originator of cyberattacks, with attack levels increasing 20% since Q4 2019. Researchers also recorded a substantial increase in attacks originating from the United Kingdom, Germany and Canada â€“ all well-established economies.
“The speed at which the cybercrime ecosystem adapts to changing socio-economic circumstances is highlighted by changing attack methods,” researchers said, adding that new data shows a sharp decline in human-driven attacks originating from low-cost “sweatshop” resources.
The reason? Early lockdowns in traditional fraud hubs within Asia, researchers reasoned.
The recorded spikes in fraudulent activity were largely driven by automation, as mechanized campaigns are easier to scale up, allowing fraudsters to quickly take advantage of the changing landscape.
Changes in consumer behavior due to COVID-19 is causing fraudsters to shift their focus on industries like Retail and Travel, with the attack rate doubled from 13% of transactions to 26%, driven by attacks on ecommerce companies as travel tailed off due to restrictions. Gaming isn”t far off either. With a 30% rise in gaming traffic, the industry was hard hit with a 23% increase in attack rates, researchers said.
In the Information Technology sector, attacks on tech platforms have risen 16% as both personal and professional collaboration and communication shifted online.
The Arkose Labs report makes several key predictions, including that automation will drive the bulk of fraud attempts in the near future, that fraudsters will soon move to a distributed model as low-skill fraudsters take advantage of online tutorials and readily available fraud toolkits, and that new attack vectors will emerge as opportunistic fraudsters widen their reach amidst the pandemic.
Analysts are also anticipating a dramatic rise in attacks as fraudsters take advantage of economic uncertainty and new individuals are pushed into cybercrime due to high unemployment.
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