Attack of the Credit-Washing Bots: 2022 Fraud Trend Series
Blog post from Socure
Identity fraud is presented as reaching a critical point in 2022, driven in part by the rapid growth of “credit washing,” in which borrowers fraudulently dispute legitimate negative credit-report information to temporarily improve their scores. The passage links the doubling of FTC digital identity theft complaints from roughly 650,000 in 2019 to 1.3 million in 2020 largely to fraudulent affidavits enabled by simplified FTC reporting procedures, alongside broader economic pressures from COVID-19. Automated bots can scale these attacks by using stolen personally identifiable information to create fraudulent accounts, overwhelm fraud-scoring systems, and support activities including phishing, scraping, and account registration. Although regulation of bots used in financial fraud appears unlikely, proposed legislation targeting retail “Grinch bots” suggests growing policymaker attention to bot-related harms. The author expects credit-washing-related complaints to remain elevated and argues that businesses should frequently update fraud models, reduce reliance on manual review queues, and use automated identity-proofing methods such as document validation and selfie liveness detection to better resist high-volume attacks.
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