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New account fraud has more than doubled since 2014, Jumio reports
We mentioned several times in our articles, the importance of companies that handle and analyse data. Jumio was one of the first companies that integrated the gaming and gambling industries. It is now considered a global leader in online identity verification. Jumio processes almost 300,000 verifications per day on behalf of their clients. The company uses cutting-edge online identity verification and authentication services that quickly and accurately connect a person’s online and real-world identities.
Fraud increased by 27.8%
The latest annual reports from Jumio reveals that new account fraud increased by 27.8% worldwide YTD in 2019. Jumio compared global ID fraud patterns from millions of ID verification transactions between 2014 and 2019.
According to Jumio’s Fraud Report, fraud is defined as an attempt by an individual to create a new online account by manipulating a government-issued ID. In our opinion, this definition is narrow and we are confident that fraud levels would skyrocket with a broader definition.
Depending on the country
The report shows that fraud levels in emerging markets were significantly higher compared to developed markets. This fact explains why gaming/gambling operators and payment processors are serving clients in various ways depending on the country of their origin. We observe delicate services to clients from developed markets, while clients from emerging markets often deal with harsh tactics. The Asia-Pacific region experienced the highest rates of full-year fraud at 3.27% while the U.S. had the lowest rates of fraud at 0.88%. This trend has been pretty consistent over the last six years, Jumio stresses.
Lowest frauds – UK
The UK has the lowest level of full-year new account fraud rates. UK’s new account fraud rates in the gaming and gambling sector are significantly lower than in other countries. Globally, fraud rates for online gaming in 2019 were close to 2.5%, while in the UK, the average new account fraud rate was just 1%. Jumio thinks this decline is the direct result of tougher new identity verification rules introduced by the UKGC.
We believe payment providers contributed massively to this phenomenon as the verification process is now stricter and more detailed.
As expected, the cryptocurrency and online gaming/gambling industries experienced higher-than-average fraud levels.