ID theft, fraud on the rise in Mexico financial services industry

Monday, April 10, 2017

Mexico's financial services customer protection agency Condusef recorded a 33.6% jump in claims of identity theft and fraud last year in its annual report, which also noted disproportionate concentration of claims at specific banks and increasing sophistication in technology-based attacks.

The agency said the number of possible total reports of fraud and identity theft rose to 5.38mn in 2016 from 4.02mn in 2015. While the number of identity theft cases actually declined to 78,888 possible cases from just over 100,000 in 2015, the figure was still double that of 2012.

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Furthermore, the identity theft reports were unusually concentrated. While Citibanamex represents 16% of Mexico's market share by deposits, according to Deutsche Bank and CNBV data, the bank was involved in 35,737 of the identity theft claims, or 45.4% of the total.

Among larger banks, identity theft claims for Santander and HSBC were proportionally close to their market share. Where Santander, with 15% of market share was named in 11,721 of the claims – or 14.9%. HSBC has 7% of the market by deposits and generated 5,431 or 6.9% of the claims.

Others generated markedly fewer reports. BBVA Bancomer, with a 23% market share, was involved in only 5,076 of the identity theft claims – around 6.4% of the total. Banorte, with 14% market share, was involved in 2,410 identity theft cases, or 3.1%

Additionally, Banco Azteca, which represents only a small percentage of market share, was cited in 10,721 of the identity theft claims.

Condusef president Mario Di Costanzo, in comments to local news outlet El Financiero, stressed the troubling concentrations and highlighted the growing sophistication of the crimes.

"Traditional identity theft as we know it has mutated in an alarming way towards cyber fraud," said Di Costanzo.

Cyber fraud, such as the use of stolen personal data to purchase goods or services online, represents 33% of the claims received by Condusef, up from 20% in 2014 and 9% in 2012. Claims of online fraud in that period jumped 123% versus traditional fraud claims, which rose 12.5% in the period.

Looking at fraud claims as a whole, complaints against Bancomer reached 1.89mn in 2016 versus 1.85mn against Citibanamex. The top form of reported fraud remains credit card fraud, representing 56% of all claims.