Preventing Account Takeover and Transaction Fraud
Account takeover fraud is one of the main forms of financial identity theft. Account takeover occurs when a fraudster obtains an individual’s personal information such as an account number, username/password, or social security number and then changes the password and official contact information, such as mail/email address, or adds another user to an existing account. Once fraudsters have control of existing bank or credit card accounts they can carry out unauthorized transactions against them.
Account takeover is an increasing area of financial exposure for businesses. In the past it was limited to financial institutions; however, this type of fraud can take place anywhere an account is used to buy or access private or confidential information, goods and services.
Common methods of combating this type of fraud involved setting up barriers such as two-factor authentication on individual accounts. This method can be expensive and was usually applied only to high-value accounts. As fraudsters have become more adept, new methods that do not create friction and cumbersome steps for consumers are needed.
A risk-based authentication process can unobtrusively verify the identity of the account holder to guard against fraud without interjecting additional steps. This kind of layered security includes analyzing and detecting behavior patterns of a user across multiple institutions and industries as well identifying suspicious activity that is associated with the device the consumer is using. Using these methods, stepped-up authentication can be applied only where there is a high potential for fraud – saving frustration for the end customer and expense for the business.
Recommended For You
Authentication Strategies for Today’s Digital Age Carefully orchestrated authentication and identification strategies are critical in today’s digital era, especially since […]
The CERCA Spring Conference, held on May 16, capped a broadly successful 2018 filing season that saw tax identity theft reduced by […]
As fraudulent attempts increase during account openings and applicants grow less patient with invasive anti-fraud techniques, organizations must find a […]
There’s good news and bad news when it comes to fraud and the growth in technology. The bad news is […]