How IoT Brings New Potential Form of Fraud

Over the past few years, the term IoT (Internet of Things) has been much talked about. What is IoT? Simply put, it is the use of the internet to connect a device to other devices. Gatner, Inc. forecasts the number of connected devices will reach 8.4 billion worldwide by 2017 and will reach 20.4 billion by 2020.

These connected devices (including home appliances) will store large amounts of data. Theoretically, any device connected to the internet can be hacked and the stored data is at risk of being stolen. There are millions of devices, operations and business networks all can now be hijacked. The existence of this connected device gave birth to a new form of fraud risk.

Almost all smart systems and applications store personal data of their owners and this is the ‘gold mine’ for fraudsters. The stored data includes name, address, contact number, credit card number, and even health information and behavior of users. Fraudsters may use malware to hijack the devices and steal data unnoticed by device owners.

This risk can extend to the realm of business. For example is the online business. Applications that businesses use to engage with their customers may store personal data, including when and where product orders are delivered. If the device and the application do not have an adequate security system, the costumers’ data can be stolen and misused. Just like what happened to a Starbucks’ customer who lost $550. It was stolen by fraudster hacking his personal account on Starbucks app and exploiting the data to steal money from his PayPal account.

Like two sides of a coin, IoT brings the potential for fraud, but also the potential to protect users from such fraud. With the fast-paced development of technology, the form of threat can change quickly and drastically. If we want to minimize risk, of course, we have to adapt to change. The only way to protect yourself effectively is by staying cautious and up to date with the latest knowledge.