In recent years, there has been a significant increase in identity fraud incidents, with large-scale network scams targeting millions of people in the United States and other Western regions.
Most of the information used for perpetrating scams is stolen by hackers from banks and other institutions. However, there are now indications that some young people, unaware of the long-term risks, are actively selling their own data to online criminals.
The latest report released by the UK’s anti-fraud service organization, Cifas, last month highlighted the issue of young people selling personal data.
Simon Miller, Director of Policy, Strategy, and Communications at Cifas, noted a substantial increase in the phenomenon of “muling” during an interview with Epoch Times. This involves individuals allowing others to use their bank accounts to transfer the proceeds of crime or for money laundering purposes.
“We have observed ‘muling’ evolving and changing rapidly to adapt to regulations and policy measures,” Miller said. “More and more people are recruited to use their accounts for illicit activities, especially young people. They are guided to sell partial information about themselves, which is subsequently used by criminals to open accounts in everyone’s name or for synthetic identity fraud.”
Miller mentioned that young people often see this as an easy way to make money. He stated, “People fall into traps; there’s a lot of peer pressure involved in these things, and many are unaware that what they are doing may be criminal.”
Most affected individuals are in the student age group, according to Miller. They are old enough to have access to financial products, which makes them attractive, yet young enough not to fully understand the consequences of their actions and the long-term impact of selling partial identity information.
This is a trend Cifas has recently observed, and the issue is not limited to the UK.
Mary Ann Miller, a fraud and cybercrime execution consultant at Prove, informed Epoch Times that she is aware of cases where individuals in the US have sold their personal data. She stated, “This indeed exists in the United States. People allow others to use their identity information, which further facilitates the scale of criminal activities.”
The notion of making easy money can be particularly enticing, especially for students or those facing economic difficulties. Especially since the onset of the COVID-19 pandemic, the United States has gradually developed a culture of fraud, she added.
John Wilson, Senior Threat Intelligence Researcher at cybersecurity firm Fortra, told Epoch Times that many desperate individuals consider selling their identity information. He explained that people often think, “My credit is already bad, so what can they do with my information anyway?” However, they may eventually need to buy a house, move into a new apartment, or apply for a credit card, leading to consequences.
Miller indicated that individuals, particularly those belonging to diverse communities, are targeted by fraudsters on gaming platforms. It starts with general chat and gradually progresses to recruiting victims for fraudulent or cyber theft activities.
“These ‘monsters’ often lurk on Telegram channels, directly message users on gaming platforms, are very active on Meta, and guide platform users to start conversations on WhatsApp. Young people are used to interacting with friends on gaming platforms, making them vulnerable,” she said.
“They appear friendly and gradually lure victims into the world of fraud, eventually becoming ‘mules.'”
Miller mentioned that as banks increasingly encourage online banking and the use of banking applications, they have a responsibility to conduct “modern identity verification processes” to confirm users’ identities.
“In the past, when you stepped into a bank, the bank staff would typically know your name. But that’s not always the case now,” she said.
On September 18, the US House Financial Services Committee held a special hearing addressing fraud and related issues.
While testifying before the Oversight and Investigations Subcommittee, Paul Benda, Executive Vice President of Risk, Fraud, and Cybersecurity at the American Bankers Association (ABA), emphasized the severity of the fraud problem and its expanding impact each year. He highlighted the lack of a unified reporting mechanism, accurate data sources to track the total amount of fraud, and a single government agency responsible for protecting Americans from large-scale financial theft occurring daily.
Benda stressed that banks alone cannot prevent these criminal activities.
He noted that various fraudulent activities are increasing, including voice phishing. However, he stated that the ABA believes most data used for identity fraud is obtained through theft or deception.
Wilson highlighted that the most common fraudulent scheme currently is employment fraud. People receive messages through social media or gaming platforms informing them they can work from home and earn a substantial income.
“One thing mentioned in these ads is that you must be at least 27 or 28… eventually, you need to prove your age, so you have to upload a photo of your driver’s license,” Wilson said. “But the real purpose is to steal your identity. They are not looking for people with no credit history but for those with some credit history.”
Victims of employment fraud believe they are engaging in an online job, according to Wilson. He noted, “I would say they are not voluntarily selling their information but rather being deceived into disclosing this data.”
Mr. Miller pointed out that most online fraud has an international dimension. He mentioned scam farms and factories the size of cities in Southeast Asia, particularly near the border of Myanmar and Thailand.
“When we talk about the sale of identity or identity element information… it’s likely orchestrated and coordinated by organized crime and can be traced back to scam farms in Southeast Asia. Some of these criminal groups are strict, highly criminal, and extremely dangerous, and those who inadvertently get involved for quick money may end up being blackmailed or facing even more severe consequences.”
The growing trends in online fraud, exploitation of young individuals, and identity theft pose significant risks not only in the UK and the US but also in English-speaking countries like Australia, New Zealand, and potentially across Europe. Vigilance and awareness are crucial in safeguarding personal data and preventing falling victim to evolving fraudulent schemes.