Industry News

The Rise Of Cyber Fraud And Identity Theft – What IT Service Providers Should Know

A man in a hoodie represents Cyber Fraud

We know cyber fraud and identity theft to be common threats in the digital age, but the scale of the problem in Australia might come as a shock. A 2016 report from the Australian Competition And Consumer Commission found that Australians were defrauded out of $300 million in 2016, with 40 per cent of that figure attributed to online scams. With the problem projected to get worse in coming years, we have detailed why many incidences of cyber crime go unreported and given information that all IT service providers must know to protect their clients’ businesses.

A Conservative Figure – Why Cyber Fraud Is Under-reported

A leading researcher into cyber crime based out of Brisbane’s Queensland University Of Technology – Dr Cassandra Cross – reported that dating and romance scams were the most prevalent form of cyber fraud reported, with a third of scams perpetrated through social media. Speaking to the Brisbane Times, Dr. Cross stated that the personal and embarrassing nature of many cyber frauds mean that the actual stats could be worse than reported.

“Part of that is the victims don’t know they have been victimised as such … there are also issues around the shame and stigma with being a victim of fraud in that no one really wants to come forward and say: ‘I was a victim, this happened to me.”

The fear of a compounded loss can also prevent reporting. Some small businesses owners who have been scammed have not reported the issue to police, out of fear that their insurance
premiums will increase as a result, says ACCC deputy chairman Michael Schaper. Other reasons for the under-reported nature of cyber fraud include lack of education around the importance of online security, under-detection, insufficient monitoring of the online space, underestimation of the importance of combating cyber fraud (or the assumption that cyber fraud is a lesser crime due to its online nature) and uncertainty of who to report cyber crimes to (the police).

With the human and financial cost of cyber fraud expected to rise in coming years, it is important we continue to educate our clients on the issue. Many businesses do not have adequate cyber security policies and protections in place, are uninformed on who to report potential attacks to, or simply do not take the threat of cyber fraud seriously.

Although traditional policing methods have yielded some results in tracking down cyber criminals, the market size (every business in the world is a potential victim), the rewards on offer, the lack of victim reporting and the relative anonymity afforded by online communication methods continue to drive growth in new fraud perpetrators.

Cyber fraud methods continuously vary; so much so that humans cannot stay current with all the variations in order to identify all the threats, all the time.  That’s where a branch of technology called machine learning comes into its own.

IT service providers such as Computer One can offer advice on advanced technologies that utilise machine learning to identify threats like ransomware and live social engineering compromises.

Next week, we’ll give you a list of the software we recommend for keeping our clients’ businesses safe from the grasp of cyber fraud and identity theft.


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