Equifax Releases Fraud White Paper on Stopping Application Fraud
Have a taste of a recent Equifax White Paper
In 2008, 86 percent of the top 25 financial institutions were meeting Javelin’s safety scorecard criteria for fraud resolution, yet only 52 percent were meeting the criteria for identity verification and identity authentication1. In 2009, Javelin’s researchers were pleased to see a 27 percent increase in the number of the institutions scoring well in the fraud prevention category2. That means that financial institutions are correctly viewing fraud prevention problems as urgent. Lenders are making progress in improving their identity fraud management processes, but much work remains to be done. More than three-fourths of American adults are Internet-active at home, and most Internet users have become comfortable in conducting their financial affairs online3. As a result the use of stolen identity information to open new credit card accounts increased 33 percent in 2009. Fraud patterns are a dynamic, moving target. When lenders bolster their fraud defenses in one area, criminals find new soft spots and shift their attacks to these less protected areas. Mercator Advisory Group calls this “the balloon effect,” with fraudsters constantly probing for the most vulnerable, least defended areas and focusing their efforts on these weak spots. Many financial institutions lack the resources to implement all best practices for fraud management in the near term. However, fraud mitigation demands constant attention. Inaction is not a realistic alternative for forward-thinking financial institutions. Equifax recommends that lenders objectively assess their fraud control strengths and weaknesses, and use the assessment to set realistic goals.
The best way to fight new-account fraud: Use an integrated suite of real-time defenses at the time and channel of application. A strong approach should have these attributes:
• Real-time processes for identity verification and out-of wallet authentication
• Flexibility to apply different fraud mitigation solutions to different types of fraud
• Robust leveraging of internal and external data sources, supported by appropriate analytics
To read the whole paper, send us an e-mail asking about stopping application fraud
If you want to talk to an Equifax specialist about optimizing your solution you can e-mail us here
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1 Javelin Strategy & Research. “2008 Banking Identity Safety Scorecard.” November 2008.
2 Javelin Strategy & Research. “Javelin Study Finds Identity Fraud Reached New High in 2009, but
Consumers are Fighting Back.” News release. February 10, 2010.
3 Javelin. “Javelin Study Finds Identity Fraud Reached New High in 2009.”
5Paterson, Ken. “Credit Card Issuer Fraud Management—Report Highlights.” Mercator Advisory
Group, December 2008.
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