Combating Fraudulent Applications
Sensitive personal information such as consumer names, addresses and social security numbers were acquired by a perpetrator who hacked into a large retailer database. This information was made available to many fraudsters who illegally purchased the information online.
The fraudsters, many of whom reside abroad, mask their IP address and use the compromised consumer information to apply for a number of new credit card accounts online.
How do you identify and take action against these fraudulent applications?
Fighting Back with First Data’s Fraud Mitigation Tools
- Financial institutions can utilize GlobalScan® to reduce the impact of application fraud by analyzing the applicant’s unique computer “fingerprint” ID. This system analyzes and assembles over 100 different attributes from a computer, such as browser type, CPU type, screen resolution, clock settings, etc., to create a unique ID. Then, using neural network models, GlobalScan analyzes the velocity of accounts submitted with the same fingerprint ID to determine risk level. When suspicious activity is detected, a financial institution can take immediate action to confirm the identity of a customer by using out-of-wallet verification through FastData,® automated two-way messaging through 2Way-ConnectSM or analyst review and subsequent approval or suspension of the account.
- Immediately after an account has been opened, a financial institution can assign a default fraud strategy to the account within First Data Falcon® which provides a basic level of protection until the account is assigned a specific fraud strategy based on the FI’s fraud client allocation tables after nightly processing. Clients may choose to set that default strategy to closely monitor transaction velocity as compared to the accountholder’s line of credit.
- In some instances, especially in cases where instant credit is granted at a retail location, perpetrators may exhaust most of the credit limit immediately, send in a bogus payment to open up the credit limit and then spend the entire amount again—all before the financial institution realizes that the payment was bad. Clients can choose to utilize Payment DefenderSM to predict the likelihood that a payment will be returned and either adjust the amount of available credit by a percentage or remove the available credit completely, to set the appropriate “open-to-buy” amount for the account.
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