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Four Ways to Address Fraud in the Public Sector

Published: May 28, 2013 by Guest Contributor

By: Maria Moynihan

Cybersecurity, identity management and fraud are common and prevalent challenges across both the public sector and private sector.  Industries as diverse as credit card issuers, retail banking, telecom service providers and eCommerce merchants are faced with fraud threats ranging from first party fraud, commercial fraud to identity theft. If you think that the problem isn’t as bad as it seems, the statistics speak for themselves:

  • Fraud accounts for 19% of the $600 billion to $800 billion in waste in the U.S. healthcare system annually
  • Medical identity theft makes up about 3% of 8.3 million overall victims of identity theft
  • In 2011, there were 431 million adult victims of cybercrime in 24 countries
  • In fiscal year 2012, the IRS’ specialized identity theft unit saw a 78% spike from last year in the number of ID theft cases submitted

The public sector can easily apply the same best practices found in the private sector for ID verification, fraud detection and risk mitigation. Here are four sure fire ways to get ahead of the problem:  

  • Implement a risk-based authentication process in citizen enrollment and account management programs
  • Include the right depth and breadth of data through public and private sources to best identity proof businesses or citizens
  • Offer real-time identity verification while ensuring security and privacy of information
  • Provide a Knowledge Based Authentication (KBA) software solution that asks applicants approved random questions based on “out-of-wallet” data

What fraud protection tactics has your organization implemented? See what industry experts suggest as best practices for fraud protection and stay tuned as I share more on this topic in future posts. You can view past Public Sector blog posts here.

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The rise of synthetic ID fraud Fraudsters don’t just stop at creating fake IDs — they take it a step further by combining real and fake information to create entirely new identities. This is known as synthetic ID fraud, a rapidly growing threat in the digital economy. Unlike traditional identity theft, where a criminal steals an existing person’s information, synthetic identity fraud involves fabricating an identity that has no real-world counterpart. This makes detection more difficult, as there’s no individual to report fraudulent activity. Without strong synthetic fraud detection measures in place, businesses may unknowingly approve loans, credit cards or accounts for these fake identities. The deepfake threat AI-powered fraud isn’t limited to generating fake physical IDs. Fraudsters are also using deepfake technology to impersonate real people. 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Strengthen synthetic identity fraud detection – Detecting synthetic identities requires a combination of behavioral analytics, document verification and cross-industry data matching. Advanced synthetic fraud detection tools can help businesses identify and block synthetic identities. Stay ahead of AI fraudsters AI-generated fake IDs and synthetic identities are evolving, but businesses don’t have to be caught off guard. By investing in identity solutions that leverage AI-driven fraud detection, businesses can protect themselves from costly fraud schemes while ensuring a seamless experience for legitimate customers. At Experian, we combine cutting-edge fraud prevention, KYC and authentication solutions to help businesses detect and prevent AI-generated fake ID and synthetic ID fraud before they cause damage. Our advanced analytics, machine learning models and real-time data insights provide the intelligence businesses need to outsmart fraudsters. Learn more *This article includes content created by an AI language model and is intended to provide general information. 1 https://www.404media.co/inside-the-underground-site-where-ai-neural-networks-churns-out-fake-ids-onlyfake/

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