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Fraud Detection in Newly Opened Accounts
Fraud continues to be a genuine problem and challenge. After a sharp and unexplained drop in identity thefts in 2010, fraud schemes climbed 12.6 percent in 2011, research by Javelin Strategy & Research shows. The cost adds up: The mean cost for new-account fraud is $3,197. If someone succeeds in opening up an account, it typically has taken a mean of 151 days to detect the fraud occurrence. As a result, fraudsters have become savvier and more opportunistic. Increasingly, they’re likely to attack the institutions with the weakest defense. At the same time, old tactics to identify them may be insufficient. Fortunately, the latest technologies and a new Experian® weapon — Precise IDSM for Customer Management — offer the opportunity to improve fraud detection substantially, especially very early in the Customer Life Cycle. Precise IDSM for Customer Management incorporates relevant and timely data to help improve decision making — data that may have been unavailable during the early life of accounts. This paper explores how this new weapon helps detect identity theft and other fraud, how data velocity can prove the key to predicting identity theft, and how to still deliver a strong and quick return on investment.