Holiday Triple Threat: Data Breaches, Identity Theft, and Fraud
This year has seen its share of data breaches and identity theft. A top concern in this gift-giving season are data breaches that might expose information about children as well as adults, that is often exploited by identity thieves. Armed with private identity information acquired through this type of data compromise, fraudsters can deceptively apply for benefits or credit, or take over existing account access.
According to Aite Group research, 27% of all cardholders—debit, credit, and prepaid—have experienced card fraud in the past five years. And consumers are concerned enough about this fraud that 63% limit their use of payment cards after fraud – and even change their provider, resulting in a 23% global attrition rate. Concurrent with that however, Aite found that 49% of consumers engage in some type of behavior that puts them at greater risk of fraud.
Javelin Research found a rapid rise in non-card fraud, which includes compromised lines of credit, Internet accounts and email payment accounts. And it noted data breaches as the greatest risk for identity fraud.
What is needed to prevent identity theft fraud losses is the ability to uniquely verify the identity tin an application in real time. This includes important attributes such as behavioral patterns and other uses of that particular identity “in the wild,” not just at a given merchant or bank. Only fraud analytic services that include complete information about an identity are able to help detect and prevent identity theft based fraud. We advise a layered approach to protecting against fraud. Risk-based fraud prevention starts with knowing who is behind the online application, and includes knowing who has access to consumer accounts and why.
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