Fraud in mobility: Uncovering and preventing the most common types.

New IDnow ebook highlights the most frequent types of fraud in the mobility sector and how best to prevent them. 

In recent years, the mobility and micromobility industry, which includes car-sharing and scooter, bicycle and vehicle rentals, have all become increasingly popular. This is largely due to the ease of convenience, but also to it being a more environmentally conscious way of travelling.  
 
Little wonder then that the mobility industry is on the move, literally. In 2023, the global shared mobility market was worth U$258 billion and is expected to grow to $401 billion by 2030.   

Click below to check out our latest ebook, ‘How to put the brakes on mobility fraud.’ 

Putting the brakes on fraud in the mobility industry.

Learn about the most common types of fraud in the mobility industry and how best to stop them.

Get your free copy

Are fraudsters winning the mobility race? 

Unfortunately, the introduction of these new mobility services has inadvertently led to new forms of illicit and fraudulent attacks. As the global mobility market continues to grow, it comes as no surprise that fraudsters are going where the money is.   

Plus, unlike the banking sector, where Know Your Customer (KYC) processes and rigorous identity verification checks are mandatory for onboarding, mobility is not as strict, and fraudsters know it. Fraud attempts are also becoming increasingly sophisticated and hard to detect due to the use of deepfake technology, where a person can digitally manipulate a video to appear as someone else.  
 
This is why knowing the identity of the customer and proving the validity of a driver’s license, for example, is of extreme importance before providing access to the car or other vehicle type.   

The most dangerous stage of a customer journey is during account creation and customer onboarding. In 2023, 36% of suspected digital fraud globally in the travel industry came from digital account creation transactions. This is when users and mobility providers are most vulnerable to fraud attacks and when fraudsters attempt to steal users’ personal information to create new bogus accounts.   

Impacts of fraud on the mobility sector. 

Fraud is no joke. When fraud occurs no matter the industry, there are serious repercussions for everyone involved because not only does it affect the individual whose identity or documents were stolen but it also affects the company in the following ways:   

• Reputational damage: Despite it not necessarily being the company’s fault, any occurrence of fraud puts its reputation on the line. If fraud is rampant, then customers believe that company is not safe to do business with.  

• Monetary loss: Fraud can cause businesses to lose a huge chunk of their revenue due to fake accounts, stolen credit cards and fraudsters exploiting vulnerabilities in onboarding processes.  

• Damage/misuse of vehicles: When fraudsters, some of which will be underage, gain access to a vehicle, the chances of damaging, misusing or stealing vehicles increases. Not to mention the potential danger and loss of life of those involved and the public. 

• Loss of customers: Customers want to know the company they are doing business with is safe, otherwise they’ll hit the road and take their business elsewhere.  

Top 5 types of fraud in mobility. 

Fraud comes in many different forms and can be difficult to detect as fraudsters have a trunk full of increasingly sophisticated attacks at their disposal. Once a mobility provider discovers and identifies one form of fraud, fraudsters come up with an entirely different set ready to trick customers again.   
 
Here are some of the most common types seen in the mobility sector:  

1. Identity fraud 

Identity fraud is the impersonation of another identity, with more than 9 million identities stolen annually.    
 
One of the fastest growing types of identity fraud is known as deepfakes. In an attempt to fool an identity verification process, fraudsters impersonate someone else to gain access to a vehicle or other transport service. This is done through digitally altering IDs, other types of documents or the physical appearance of an actual person. .   

Synthetic fraud is an increasingly common form of fraud within mobility, specifically in auto lending when users apply for a loan. In fact,  2023 saw a 98% increase in synthetic fraud attempts causing $7.9 billion in losses. In a similar process to document fraud, synthetic fraud stitches together various parts of personal information from one or multiple people to create a new, fake identity. Also known as Frankenstein fraud, identity fraud is a mix of genuine and fake data.   

2. Document fraud 

One of the most common types of fraud in the mobility sector is document fraud which saw a global increase of 31% in 2023. This involves any form of tampering, alteration or creation of a completely new fake identity document. Document fraud makes use of fake IDs to access something a person might otherwise be unable to access, such as an underage person wanting to rent an e-scooter or car.  
 
In such cases, legitimate documents are altered to change the holder’s identity. This could include replacing the image or adding or replacing specific data, most likely age, on the document.   
 
As underage car and scooter rentals can have disastrous consequences for both the person and the vehicle, mobility operators have a responsibility to tackle document fraud and comply with minimum age requirements.   

3. Repeat fraud 

Once a fraudster is successful with a fraud attack, what is to stop them from trying again? Fraudsters will exploit every opportunity they can to abuse the system as many times as possible. And, once successful, they will keep coming back twice as hard. 
 
Synthetic fraud is a popular way for fraudsters to commit recurring fraud. They simply create numerous fake identities with the information they obtain from different users and try to use those identities as many times as possible, across various services. Once verified, the fake identities can then be used to abuse company promotions again and again.    
 
Putting a stop to repeat fraud cycles is of the utmost importance since fraudsters will never stop trying to exploit a company’s security system, especially if they’ve been successful the first time.   

4. Account takeover fraud 

Account takeover fraud is a growing problem for mobility services, specifically ride-hailing apps, car sharing and micromobility services. Over the past five years, account takeover fraud has increased 113% with 2023 seeing $13 billion in losses. When accounts are taken over, fraudsters can steal personal information to create a new account to either take money from someone who ordered a ride, leaving them with a no-show driver, or create completely fake profiles of users and drivers.  
 
With a fake driver profile, fraudsters can trick the ride-hailing service into believing real journeys were made using spoofed GPS locations. Fraudsters can create a never-ending cycle where they continuously create fake cancellations and fake bookings to gain even more money.  

5. Account sharing fraud 

The newest fraud on the block is account sharing fraud. Although it sounds similar to account takeover fraud, account sharing fraud occurs after the KYC check has been performed, when fraudsters exploit a vulnerability in the onboarding process to gain access to the vehicle. They then can un-install and re-install the app to commit repeat fraud.   
 
Fraudsters also sell the accounts/identities (real or fake) they have gained entry to through account sharing, helping them commit synthetic fraud.   

Drive trust with seamless, secure onboarding. 

Before allowing customers to get behind the wheel of any type of vehicle, a company needs to know that the person they are entering into business with is who they say they are. Not only will this prevent fraud, but it will also ensure the person taking control of the vehicle is legally entitled to and is safe on the road.   
 
IDnow’s automated identity verification solutions work with all types of mobility providers to assist them in offering a safe and user-friendly way of checking the identities of potential users.   

Better yet, our solutions align with a mobility provider’s specific risk appetite and customer needs. From document verification and biometric verification to step-up authentication, IDnow’s automated identity verification solutions are convenient, secure and globally compliant. We can verify over 3,000 identity documents for 195 countries in over 30+ languages, 24/7.  

Find out more about preventing fraud in the mobility industry and creating a safer and more secure experience for all users in our blogs, ‘Age verification in transport: Moving towards a better service?‘, ‘Connected vehicles and driver identification: Fewer keys for greater safety?‘ and ‘Mobility as a Service and digital identity verification—a partnership.‘

By

Kristen Walter
Jr. Content Marketing Manager
Connect with Kristen on LinkedIn