Bryan Lewis, CEO of Intellicheck, says businesses need to fight fraud with every passing day. He breaks it down in a new PYMNTS e-book, The Implications of Uncertainty.
Data breaches and mail theft are causing record levels of personal information, payment information, login information, and even check theft. “Right now, all of our information is out there on the dark web, and the only question is when it will be used against us.”
Coupled with a bad deception strategy, the scammer gets the keys to the castle. The perfect scenario is to know the answers to the quiz in advance.
Let's talk about how it's done:
- Identity theft and identity theft: The onslaught began in 2017 with 147 million records compromised and has grown every year since. Last year, more than 3,200 separate data breaches occurred, resulting in more than 353 million records being published on the dark web.
- The rapid increase in mail theft exposes more information than just valid documents used for identity theft and check fraud.
- This compromised data is shared online, where criminals can purchase complete identities, including name, address, social security number, date of birth, credit score, and currently open account information, for less than $30 per identity. can. (Currently, the amount of data available online is enormous.)
- Armed with this treasure trove of real data, they buy fake IDs from overseas for less than $100. These IDs are tagged with a photo containing the victim's girlfriend's PII data and pass traditional ID verification checks, allowing them to disguise and impersonate the targeted victim's identity. . These high-quality fakes fool even law enforcement agencies.
From there, you can:
- Opening new accounts: Impersonating a victim with no previous fraudulent activity reported through a traditional credit institution to open multiple accounts within 30 days before alerting the victim or the issuing financial institution. can.
- Account Takeover Attacks: ATO attacks increased 354% year-over-year in 2023. Scammers know this is an easier method since no credit withdrawal is required and knowledge-based answers are often used to verify account information. Contact and call centers are often used to research appropriate defenses, and social media is leveraged to obtain additional information needed to successfully complete an ATO attempt.
What are some poor fraud strategies still being used?
- See the exact same data sources used by criminals. This is valid personal identification information that criminals have purchased through the dark web. Scammers are very effective at gathering accurate information and using it to impersonate their targets. We need to do more than just look at the same data.
- Relying on identity verification tools is highly prone to false positives and negatives due to template models that rely on image quality and OCR processing. Scammers bypass her ID verification process by sending low-quality images. This forces manual review by human eyes, which is never a good thing.
How is Intellicheck implementing next-generation fraud strategies?
- Verify the validity and ownership of submitted documents using authoritative data sources. This includes validating hidden encoded security features that are not publicly known, compared to template models widely available online.
- Implementing passive datasets that allow the platform to move beyond personally identifiable information submitted:
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- Proxy detection: If online, what IP address is the proxy being sent to?
- Geographic location: Where is the transaction actually taking place?
- Device fingerprint: How many times has this device been seen?
- Behavioral Analytics: Behavioral models are comprised of all available datasets and help go beyond traditional data checks to truly uncover the situation.
- And finally, build a data consortium.
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- By sharing passive and transactional data, we come together to build a network of trust and certainty.
- We now have a better understanding of the tools fraudsters use, such as artificial intelligence (AI) and data sharing. They work well together, and we must do the same if we are to win the war.
What are the benefits of implementing these next-generation fraud strategies?
- You can break through the traditional glass ceiling set by previous outdated fraud strategies.
- You can stop the bad guys in their tracks by not continuing to use the strategies they have relied on to succeed.
- Instead, we address the answer key by using authoritative and passive datasets.
- Create strategies designed for customers, not scammers. This creates a low-friction process that doesn't make real customers feel like criminals.
- This reduces abandonment rates and increases conversion rates. Customers will no longer be dissatisfied with her KYC process.
- We help our customers increase new account openings by an average of 20% while reducing fraud losses to less than 1%.
- Protecting your customer base creates more customer loyalty.
- Stop bad guys from wreaking havoc on your customers. Customers who fall victim to identity theft not only face significant financial losses, but also spend endless time and energy on disputes and remediation.
- At the end of the day, everyone has a budget for the amount of fraud they can afford, but there is no limit to the number of new customers they want to acquire.