New account fraud is a type of identity theft that occurs when a criminal uses a stolen or fake identity to create a new bank account or credit card. Fraudsters are able to steal personal information, such as a victim’s name, Social Security number, or birthdate, to open a fraudulent account. These bogus accounts can then be used for various purposes, including obtaining loans, making purchases, and accessing services such as online banking.
One of the best ways to prevent new account fraud is to implement a fraud detection solution. This strategy can help your company reduce chargebacks, which in turn decreases your true fraud rate. Using a risk-based, machine learning-powered detection tool can also help you determine the most likely types of fraud. A security freeze can also be used to help prevent new account fraud. Basically, this requires a lender to verify a user’s authorization before issuing a new account.
Another useful way to combat new account fraud is to provide your users with a biometric verification process. Unlike a photo or signature, a physical face can be verified through a user-facing camera. Biometric verification can be a boon to your organization because it enables you to verify the identity of an individual who may be in another location.
In addition to biometric identification, there prevent new account fraud are a few other tricks of the trade that can help your business avoid new account fraud. Among them are a customer identification program and the use of behavioral analytics. The latter is a fancy term for a program that analyses the data you collect from your customers. Behavioral analytics can tell you if your applicants make any errors when filling out an application or if they interact in a way that deviates from what a typical new customer would do.
When it comes to preventing new account fraud, iProov’s technology can be an effective way to bring national grade security to your onboarding processes. By enabling users to submit their face against a government-certified identity document, iProov’s biometric verification ensures that only legitimate individuals can gain access to a new account.
Detecting new account fraud is not an easy task. As a result, banks are looking to better protect themselves with solutions such as iProov’s. Using this technology, organizations can quickly and easily bring national grade security to their onboarding processes, while at the same time boosting trust and helping consumers feel secure when opening their accounts.
iProov’s facial recognition technology can verify a person’s real-life presence by illuminating their face with a series of bright colors. Unlike a password, this is a foolproof method of verifying an identity, thereby eliminating the need for other forms of verification.
While there are numerous new account fraud methods, there are a few that stand out. Identifying the shortest path to new accounts, or the shortest path to an account that has been created by a bot, is a good way to prevent these fraudsters from putting their newfound funds to good use.