Fraudsters Raking It In, Earning Far More Than CEOs

Jul 29, 2022

Fraudsters are really cashing in on their illegal exploits. So much that Arkose Labs, a global leader in fraud deterrence and fraud security, has revealed new discoveries into the “global fraud economy.”

According to the data featured in the State of Fraud and Security report, the number of “attack attempts” has escalated. Fraud “employment” has also seen a growth of “tenfold”. And the “Master Fraudster” can earn as much as 8 times the salary of a CEO leading a legal company. 

Kevin Gosschalk, founder and CEO of Arkose Labs, had this to say:

“The ROI for cyberattacks is greater than ever, so fraudsters are willing to invest more energy in the right mix of tools and resources to be successful and turn profits.”

Here Are More Findings About The Latest In Fraud Attack Trends

Based on what is described below, the likelihood for fraudsters to profit will significantly increase. 

  • Account compromises and fake accounts are leading the way in “high monetization potential.” Automated account takeovers (ATOs) were 30 percent higher in the first quarter when compared to the two previous years. In the first quarter of 2022, 1 in 4 accounts was in fact fake. These accounts were able to abuse promotions and free trials. 
  • The first quarter of 2022 also experienced higher than average “bot-driven attacks.” Also, bot attacks have three times more complex “attack signatures” than in previous years. This makes detection for businesses far more complex. 
  • Human-led bot attacks are also on the rise. These particular attacks tend to be more “targeted” and “persistent”. They also are incredibly steadfast in keeping themselves under the radar. 
  • Each industry experienced a massive spike in attacks. However, each industry was targeted in a different way, using various patterns of attack. 
  • A large portion of attacks worldwide (40%), originated from Asia. Just in Asia, attacks from India and China surged by 70%. The “top 5 attacking countries” include the U.S., India, China, Great Britain, and Vietnam. All of these countries contributed to over 60% of attacks just in the first quarter. 

Fraud As Employment? 

As bizarre as it sounds, job growth among fraudsters is actually outpacing cybersecurity employees. Even though we currently have 4.19 million people employed in cybersecurity, this still leaves 2.72 million jobs that remain unfilled. 

The unfortunate ramifications of this shortage are that this trend is increasingly placing companies’ security at risk. The number of those entering “cybercrime” careers is growing faster than the number of companies hiring and training cybersecurity professionals. 

What’s more, is that cybercriminals’ wages are also rising. According to the latest studies, the number of career fraudsters has surged tenfold since 2019. This has far exceeded the current number of 4.19 million cybersecurity personnel. 

How Fraudsters Get Their Start

Brett Johnson, Chief Criminal Officer for Arkose Labs, says that there are essentially two categories of fraudsters: Rookie Fraudsters and Master Fraudsters. 

Johnson explains how Rookie Fraudsters get their start:

“They can buy a tutorial for $5 or $10, take a live instruction class that runs anywhere from $300 up to $3,500, which teaches the type of fraud they want to focus on; they can watch YouTube videos to perfect their approach, and they can simply ask questions of other fraudsters in dark-web chat channels”.

Fraudsters also use messaging and marketplace platforms to promote their personal fraud business. They also make recommendations on attack techniques and tools. They even provide free “step-by-step” guides for Rookie Fraudsters. Thanks to this oftentimes free and widespread information, Rookie Fraudsters are able to level up their attack skills faster. 

Those people who are considered “Rookie Fraudsters” can earn as much as $20,000 per month. Those who fall under the “Master Fraudsters” category can see as much as $600,000 per month in earnings. That comes to $7.2 million a year. These wages are as much as 800% more than CEOs that average a little over $790,000. 

Fraugster Steps In 

Although the current security landscape looks incredibly vulnerable, a Berlin-based artificial intelligence company named Fraugster has come up with a solution. 

It launched Alternative Credit Decisions which is an application that enables buy-now-pay later merchants to offer more approvals to customers for BNPL loans without increasing credit risk. 

It enhances the BNPL scoring models by featuring an excess of 100 attributes to get a more precise view of a customer’s credit risk. Some of the attributes that are featured include account history, purchase history, unpaid amounts, and “positive transaction history.”

Companies Must Fight Back

There is no question that fraudsters are growing in number and technical skill, so much that many companies will fall victim to fraud if no preventative measures are taken.

On a positive note, more software companies are busy developing new applications in order to identify and prevent fraud. 

The key is to continue to stay more than a few steps ahead of fraudsters to mitigate any damage they can incur on any unsuspecting business.

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