| While this article is pretty hand-wavy, there are some interesting trends that do arise in fraud during a downturn. I do not fully know what drives it but I suspect the following: * With more people being laid off, taking pay cuts etc. and with their sources of income drying up, they may be forced to find easier avenues to making money - especially if they have nothing to lose. * Credit companies begin to tighten the lending limits, again forcing people who may have been on the fence, to look into committing fraud. * Someone who genuinely is unable to pay off their credit card/loan or is worried about their job in a recession, might be tempted to claim unauthorized charges in order to not impact their credit scores - this would be first party fraud. Insiders would absolutely know the lay of the land and how to perpetrate fraud without being caught. There will definitely be more disgruntled employees during a recession but I am skeptical of the scale of fraud being mentioned in the article. I am unconvinced that they would put their reputation and future employment on the line for short-term illicit gains. In a strange way, we also do see a lot of fraud during a booming economy (something that another comment mentioned as being contradictory). The economy is flush with money -> companies are in growth mode and are rarely checking to see how many of their signups are from compromised identities -> the situation is ripe for third-party fraud and referral abuse. Source: I work in Fraud risk management |
What'll be interesting is the meta-fraud of claiming false chargebacks or what the new fraud looks like because the shape of fraud is changing, and the model wouldn't have seen as much of it.