Q: What types of fraud threats should businesses be prepared for?
A: First party fraud poses a significant and growing threat that often goes unnoticed. This type of fraud involves perpetrators misrepresenting their identity, typically by providing false information on credit applications or using counterfeit documents. For instance, opening a Buy Now Pay Later account and putting charges against it with no intention of repayment. Often termed as ‘friendly fraud’, it can be challenging to detect due to the seemingly legitimate nature of the transactions.
Q. How does fraud involving victims differ?
A: Fraud with victims, known as third party fraud, typically begins with identity theft. Here perpetrators use stolen information, such as names or credit card numbers, to impersonate- individuals without their permission.
With just a single piece of personal data, fraudsters can exploit other sources to construct false profiles or replica identities. This enables them to execute identity takeover, a fast-growing fraud vector identified by Equifax FraudCheck insights. By exploiting stolen data, perpetrators can impersonate genuine users to bypass identity verification and onboarding processes.
Q. Are there specific account types that fraudsters target?
A: While fraudsters of the past few years have favoured non-credit accounts like utility and subscription services, there has been a recent shift towards targeting credit accounts. Both types of accounts are susceptible to fraud, as fraudsters exploit vulnerabilities in security systems and processes.
Q: Are there particular segments that face heightened risk?
A: Fraudsters prioritise high-value asset classes such as auto loans and commercial finance in their pursuit of maximum returns. By contrast, fraud associated with lower-value asset classes like credit cards and personal loans has been on the decline.
Q. What are the top do’s and don'ts in the fight against fraud?
A: Do integrate identity verification with fraud assessment. Combining these checks ensures a comprehensive picture of your customer, enabling informed decisions on whether to proceed, challenge or prevent online verifications.
Don’t rely solely on a single data point for identity or risk assessment. Given the complexity of fraud, a one-size-fits-all approach is inadequate. Employing multiple data points and a layered strategy is essential for getting the friction right for the specific consumer and journey touchpoint.
Equifax data analytic-driven fraud solutions leverage global data networks and advanced algorithms to scrutinise extensive data sets in real-time, facilitating a seamless experience for trusted customers or additional authentication for potentially risky ones.
Q. How is AI impacting fraud prevention?
A: Artificial Intelligence (AI) supports other fraud prevention measures by enabling continuous learning and adaptation necessary to outpace evolving fraudulent techniques. Remember that fraudsters too will be employing AI - for identity forgery and to find new loopholes to exploit - so businesses must never underestimate the importance of tried and tested data points in verifying customer information. Address, phone number and email remain highly effective indicators for corroborating the authenticity of customer application materials.
Contact Equifax today to explore our comprehensive fraud and identity solutions.
Related Posts
Cleansing your customer data of deceased records improves data integrity and helps businesses mitigate legal and financial risks. As the new year approaches, it’s an ideal time to cleanse your database and ensure it contains accurate and up-to-date customer information.
While PEP, sanctions and adverse media screening are vital for customer due diligence, false positives create unnecessary delays and frustration. These inaccurate matches waste time and resources, slowing down onboarding and impacting the customer experience.
So, how can you optimise your screening process and minimise false positives?