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Pindrop report reveals states restricting biometrics are twice as vulnerable to fraud

Pindrop report reveals states restricting biometrics are twice as vulnerable to fraud
 

Consumers living in U.S. states that impose enhanced restrictions on biometrics are twice as likely to experience fraud, according to a new report from call center security vendor Pindrop.

The report was funded and compiled by the vendor.

The findings come from analyzing 5 billion phone calls and 3 million fraud cases involving financial institutions, insurers and retailers.

The report identified the states of California, Texas, Illinois and Washington – all jurisdictions with potent pro-privacy rules — as contributing to 33 percent of all fraud losses reported in the United States.

The link between the two trends is not backed up in a way that would make a confident decision by business owners.

“Today’s fraudsters are more equipped and creative than ever, using deep fakes, the regulatory landscape and self-service channels to help them successfully attack consumers and corporations,” says Vijay Balasubramaniyan, the CEO and co-founder of Pindrop.

According to the report, the risk of fraud also is increasing for consumers and corporations due to factors including the use of artificial intelligence, a rise in self-service channels and a trend toward regulation without security or fraud prevention exemptions.

The report also revealed that financial uncertainty has caused an increase in fraud offenses. But data breaches and retail fraud are growing rapidly. For example, payment fraud increased 40 percent from 2021 to 2022. And 3.6 percent of 2022 e-commerce revenue was stolen by fraudsters.

The report says that fraudsters are using data from the dark web to identify valuable accounts and coordinate attacks on them. The report also found that fraud is a significant problem in the retail industry, with one fraudulent call for every 347 calls.

“In addition to new technologies, fraudsters are reverting to pre-pandemic social engineering tricks, causing retailers and financial institutions billions in losses,” adds Balasubramanian.

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