Make more informed decisions by detecting and preventing fraud

Extend fraud protection beyond account origination

With a long history of use in the account origination phase of the Customer Life Cycle, negative files and fraud consortium databases are demonstrating increasing value for account management. Whether it’s a company’s internal cross-business negative list, an industry-specific suspect file or a consortium of known fraud records — such as Experian’s National Fraud DatabaseSM — there is an emerging return on investment case for the use of these files in postbook account transactions, particularly those deemed high-risk. Consider, for example, the risk of account takeover from address, authorized user or account password changes. According to Javelin Strategy and Research’s 2010 Identity Fraud Survey Report, account takeover still accounted for 11 percent of identity theft in 2009. While this number may seem like a small percentage of the overall identity theft problem, account takeovers generally take longer to detect and cause higher fraud losses.

To help combat account takeover losses, most large financial institutions and a growing number of smaller organizations have implemented proactive alerts to customers when certain account changes are made. So what role can negative files play in mitigating the account takeover risk?

In addition to alerts, requests for address or other risky changes can be screened against negative files and known fraud records. Hits or matches to these records — such as an address known to be associated with fraud — can be prioritized and routed for further special handling. This handling may consist of a letter mailed to the customer’s old address or, depending on the level of risk and/or type of match, something more time-sensitive, like an email, a text message or a phone call from a representative to confirm the change. With the increase in new account takeover methods, such as adding a fraudulent authorized user to an account or changing the password of an online account,1 there never has been a better time to consider the inherent value of negative files as a means to reduce fraud exposure and retain customers.

Learn more about the value of negative file data in account management and Experian’s National Fraud Database.

1Javelin Strategy and Research, 2010 Identity Fraud Survey Report


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