Each day, you can encounter all types of digital bad actors working in different locations worldwide, but they all have one thing in common: They’re looking for any vulnerability in your systems they can exploit to carry out their nefarious schemes. Once they gain access to your services, fraudsters can swindle you in practically no time. Or they can play the long game and linger for years before disappearing without a trace.
New account fraud, in one form or another, is one of the tried-and-true methods fraudsters use to slip past your detection software. That’s why using top-notch ID verification measures is essential to help your business weed out users with malicious intent.
If you’re concerned about identifying fraud, here are the fundamentals of new account opening fraud you should know. Armed with this information, you can better equip your business to catch bad actors before they strike.
Stolen Identities
It’s not the oldest trick in the book, but it’s close. Stealing someone’s identity isn’t easy, but with phishing attempts and other methods, fraudsters can get all the PII they need to pose as someone else online.
Sometimes the motivation is benign—an individual simply wants to hide poor credit history, for example. But in other cases, fraud rings accumulate a slew of stolen identities to target all kinds of businesses, from online retailers to financial services companies.
Fraudsters don’t necessarily have to steal someone’s identity to use it. Vast troves of compromised PII are available on the dark web due to data breaches and other leaks. Selling this information has been quite lucrative for some and purchasing it from a third party helps fraudsters reduce their exposure.
Synthetic Identities
Most people think of synthetic identities as hybrid identities. Fraudsters use bits and pieces of PII from several different users, combining them into a single profile that, when created, doesn’t correspond to any actual person.
Another type of synthetic identity involves fraudsters manufacturing fictional pieces of PII, such as a social security number, and combining them with the PII from real users. Synthetic identities are more than capable of duping outdated PII-based ID verification systems, making them an effective means of setting up bot attacks and other digital assaults.
The Power of Behavioral Analytics
With all the compromised PII floating around on the dark web, fraudsters don’t have to work too hard to fool outdated, PII-based fraud detection tools. If your business relies on a system like this, it’s time to invest in an upgrade. Modern fraud detection tools use the power of behavioral analytics and evaluate user activity based on pre-submit data.
If you were only looking at submitted information, like outdated fraud detection tools do, you’d have difficulty telling whether the user in question is genuine or someone with ill intent. Bad actors can use stolen or otherwise compromised PII to mask their identities, but they can’t hide their behavior as they insert the PII into your site forms.
Behavioral analytics software examines a user’s behavior, passively reading their digital body language to spot signs of fraud. Suppose a user retypes their social security number three different ways before moving on to the next field. In that case, behavioral analytics tools can recognize it as risky activity and flag the user in real time, enabling your step-up verification systems to intervene without delay.
The Benefits of Identity Orchestration
If you visited a website to apply for an auto loan, for example, you likely wouldn’t have any trouble remembering your name or date of birth. So, when behavioral analytics software sees users retyping these details, it identifies them as unfamiliar with the PII they’re using to fill out the form.
Based on behavior, the leading identity orchestration software categorizes users into three subgroups: risky, neutral, and genuine. Risky users are directed to your step-up measures for more rigorous ID verification, while your actual customers can proceed unencumbered.
With identity orchestration, you can rapidly and accurately pre-screen users at scale and know who your customers are before they hit your identity stack. Essentially, identity orchestration tools use behavioral analytics to enhance your existing ID verification flow with clear, session-level insights for every applicant. That makes it among the most effective ways for your organization to detect fraud.
About NeuroID
Securing growth in the digital space is critical for any modern organization, but you can’t reliably expand your user base and develop your platforms without robust fraud detection systems. For advanced tools powered by groundbreaking technology, turn to NeuroID. Instead of relying on compromised PII, NeuroID utilizes the strength of behavioral analytics to identify early warnings of fraud, allowing you to stop bad actors in their tracks. NeuroID passively reads a user’s digital body language as they interact with your site forms, alerting you to risky behavior and indicators of fraudulent activity. With this pre-submit data, NeuroID offers an effective solution to proactively detect fraud rings, synthetic identities, and more. Experience the NeuroID advantage for your organization today.
Catch new account opening fraud in real time with NeuroID software at https://www.neuro-id.com/
Original Source: https://bit.ly/3GFBekB
