Identity verification provider AU10TIX has released its Q1 2024 Global Identity Fraud Report with online gaming at the forefront of its research.
AU10TIX found that the global online gaming market, which generates $26 billion in revenue annually, saw instances of fraud in Q1 2024 increase by more than 250% compared to the same period last year.
The results were led by payment fraud, which accounted for 62% of all fraud attacks during the quarter due to its limited regulation. By comparison, payment fraud made up approximately 39% of overall identity fraud cases in Q1 2023.
“Organized criminal groups are increasingly using AI to commit large-scale, coordinated identity fraud,” said AU10TIX CEO Dan Yerushalmi. “Our advanced machine learning technology, multi-layered defense system, and consortium of 60+ tier-1 companies enable us to detect and prevent this sophisticated fraud, which most identify verification platforms miss. We are committed to protecting our customers and leading the way with innovative, future-proof solutions that address emerging challenges effectively.”
Gaming operators and regulators are also dealing with bonus abuse with 50% of the attacks involving fraudsters creating multiple accounts to exploit promotional deals awarded to new customers.
AU10TIX has found that verifying identities using selfies proves to be effective with document number fraud being the most popular mode of attack. Document number cases increased by 18% in Q1 2024 compared to the same period last year. Face picture fraud increased by 28% during the quarter compared to Q4 2023 while fraud attacks using selfies remained stagnant between the last quarter of FY2023 and the first quarter of 2024.
U.S. passport IDs proved to be the most forged document in Q1 2024 due to deepfake technology.
AU10TIX provides outlook
AU10TIX analysts expect payment fraud cases in gaming to decline once more operators implement and comply with identity verification, age verification, and KYC solutions. The company is urging online operators across the world to “self-regulate” to prevent fraud.
Gartner Emerging Tech projects that by 2027 90% of online vendors that provide age-restricted services will implement age verification and consent tools to comply with new security regulations, including the Children’s Online Privacy Protection Act.
A tool operators can leverage is AU10TIX’s app, which offers “automated, in-person, and POS identity and age verification abilities.” The app can verify identities in 4-8 seconds.
