Stratford Management Japan: Understanding New Account Fraud
In the past several years, there has been an increase in the amount of so-called “new account fraud” across the globe. Done for a variety of reasons, this kind of scheme uses false identities (often through identity theft) to create online accounts. The Holiday Fraud Report from 2019, released by Jumio, details six years’ worth of activity, culminating in December 2019. As the holiday season approaches, it may be useful to take some key points from the report to protect yourself from shady dealings this year and in the future.
At Stratford Management, based in Japan, we have years of experience handling the assets and financial investments of our clients. Many of those clients have been with us for more than five years due to our commitment to customer satisfaction. For more information about how we can help you avoid financial traps and grow your wealth, contact our Tokyo office today.
Defining New Account Fraud
Jumio’s report focuses on the weekend after the United States holiday of Thanksgiving, which includes both Black Friday and Cyber Monday. The weekend is one of the biggest for sales around the world, as it is traditionally a time for making purchases for upcoming holidays like Christmas. However, it’s also a time that many unsuspecting people can fall prey to fraudsters.
New account schemes are defined by Security Magazine as criminal schemes in which the perpetrator obtains and wrongfully uses a government-issued ID to create a new account in online financial or consumer service websites. For example, a fraudster might go after and steal a person’s private information like:
- billing addresses
- full legal name(s)
- Social Security numbers
- bank account numbers
- credit card numbers
Once they have this information, they build an account linked to that identity. Then, they make purchases using this false information, effectively billing the wrong person for all those items or services they “bought.”
Takeaways From Jumio’s Report
There is plenty to chew on in the Jumio report, but we’ve compiled a short list of items we think are particularly relevant and interesting.
Behind the Times
First, companies seem to lack an awareness of modern hacking and data breach initiatives, leaving them unable to protect clients from identity theft and account hijacking. Even more startling, companies are having a harder time even detecting the fraud as it happens, as their verification methods are sometimes unable to distinguish suspicious accounts from bona fide ones.
There is more bad news, unfortunately. Since 2014, the amount of new account schemes that have been perpetrated have increased by more than 100%. Whether through economic downturn that leads some to venture into crime, the development of new techniques to breach data, or some other factor, we seem to be living in an era that continually gets worse as far as online cybercrime is concerned.
Variation Among Markets
Finally, let’s take a look at the different worldwide markets that might influence where you decide to invest your money. When it comes to fraud, the study found that the riskiest area is in the Asia-Pacific region, where rates of this kind of crime can reach 3.27%. On the other hand, the United States actually had the lowest rate of fraud throughout the year, at less than 1% of total financial transactions.
This tracks with the general worldwide trends. Developing nations (such as China and India) experience on the whole more of this kind of crime than developed countries. Additionally, more schemes of this nature are perpetrated within the online gambling and cryptocurrency markets than other industries, while industries related to travel and entertainment have the lowest rates.
There are steps you can take to guard yourself against these risks. Some of the most important include:
- do not conduct wire transfers; use banks and credit cards instead
- never give away private information
- change online passwords frequently
- invest in proper malware protection, including antivirus software
- discuss potential financial opportunities with a financial advisor
Stratford Management in Japan is headquartered in Tokyo. Our financial experts are available for consultations regarding market trends, risks, investment practices, and additional wealth management topics. If you need assistance evaluating your assets, consider calling our office and setting up a meeting with one of our representatives as soon as possible.