Identity fraud rates reached 2.1 per cent of transactions in 2024, with fraudsters increasingly leveraging artificial intelligence tools to target financial institutions, according to new research from AuthenticID, an identity verification provider.
The report highlights a 76 per cent surge in phishing attempts and a 42 per cent increase in fake IDs and suspicious biometric transaction detections, signaling a shift towards more sophisticated fraud methods.
Account takeover scams saw a dramatic increase of 250 per cent last year. Victims of these scams not only face financial losses, averaging about $180 per incident, but 40 per cent also suffer from subsequent identity theft. Predictions within the report suggest that this type of fraud will become even more prevalent than ransomware in 2025.
The use of deepfake technology and generative AI is also on the rise, compounding the threat range. The report finds that 46 per cent of businesses surveyed reported an increase in deepfake and generative AI fraud, while 60 per cent of Americans now view the spread of misleading AI-generated audio and video as their greatest concern regarding fraud.
“In 2024, we saw just how sophisticated fraud has now become: from deepfakes to sophisticated counterfeit IDs, generative AI has changed the identity fraud game,” said Blair Cohen, AuthenticID founder and president.
“It’s clear from our data and surveys that businesses may not even know the extent of the fraud they’re allowing to pass through their systems – making both vigilance and action crucial in 2025.”
Additional findings
The 2025 State of Identity Fraud Report also reveals large increases in both workplace and payment fraud, exacerbated by the rapid adoption of fast payment systems and inadequate identity verification processes. Fraudsters are not only becoming more sophisticated but are also exploiting new technologies and vulnerabilities faster than they can be addressed.
Similarly, instant payment platforms and new payment technologies present increasing opportunities for fraudsters, worsened by insufficient identity verification methods.
“In 2025, businesses should embrace the mentality to ‘think like a hacker,’ to combat new cyber threats,” said Chris Borkenhagen, chief digital officer/information security officer at AuthenticID.
“Staying ahead of evolving strategies such as AI deepfake-generated documents and biometrics, emerging
technologies, and bad actor account takeover tactics are crucial in protecting your business, safeguarding data, and building trust with customers.”
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