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With just 52 days until the traditional start of the holiday shopping season post-Thanksgiving, consumers and criminals are gearing up for a busy period. A new report from ACI Worldwide Inc. forecasts that synthetic-identity fraud and artificial-intelligence use will be a big lump of coal for merchants. Meanwhile, identity platform Trulioo debuts a new tool to help merchants counter synthetic and third-party fraud.
ACI, in its annual Unwrapping Checkout Trends report, says its data show fraud increased 3% in the first half of 2024 year-over-year, with synthetic identity fraud growing 26% in the period. Synthetic identity fraud refers to cases when criminals merge genuine information with fabricated information to create an identity that may appear authentic and can be used to open accounts and make fraudulent purchases, ACI says.
This holiday shopping season, ACI forecasts that criminals will increase their use of AI tools to exploit vulnerabilities and mask their activities with fake accounts and identities to scale their attacks. While automated bots have long been a component of fraud, the introduction of easier-to-use AI technology makes the threat more powerful.
“[Since] at least a year back we’ve been seeing a rapid growth in industrialized AI impersonation. The burst-like growth can be accounted to fraudsters’ success in implementing randomization into GAI ID (generative artificial intelligence) documents and biometrics. This enabled the mass-production of potentially never-repeating documents and biometrics,” Ofer Friedman, chief business development officer for AU10TIX, told Digital Transactions News in September.
ACI suggests merchants also use AI tools to help deal with the threat. “The rapid proliferation of AI-driven fraud tactics and stolen data on the Dark Web is escalating threats, making it harder than ever for merchants to distinguish real customers,” Cleber Martins, ACI head of payments intelligence and risk solutions, said in a statement. “Merchants should tighten their defenses by harnessing AI predictive modeling to detect threats and using payment-intelligence signals to eliminate false positives without disrupting genuine transactions.”
ACI forecasts holiday-shopping transaction volumes will increase 3% on Thanksgiving and 4% on the Friday after it—known as Black Friday—compared with 2023 levels. The most growth is predicted for Cyber Monday, the Monday after Thanksgiving, with an expected 12% increase.
In related news, Vancouver, British Columbia-based Trulioo released its Trulioo Fraud Intelligence service, which the company says can provide predictive transaction insights across more than 195 countries.
Among its features are a single integrated platform that includes know-your-customer data checks, Identity Document Verification, Watchlist Screening, and Fraud Intelligence, all Trulioo-branded services. It also provides a consolidated risk score and global data sets to help tune risk models to each country, according to Trulioo.
