Search Results for: synthetic id

For the last several months, Experian has participated as the only credit bureau in the pilot of the electronic Consent Based Social Security Number (SSN) Verification (eCBSV) service. As we move forward to general rollout and expanded availability later this year, it’s time to review the benefits of eCBSV and how it helps businesses prevent synthetic identity fraud.   Service and program overview The eCBSV service combats synthetic identity fraud by comparing data provided electronically by approved financial institutions against the Social Security Administration’s (SSA) database in real time. This service helps financial institutions verify SSNs more efficiently and enables improved experiences for identifying legitimate or possibly synthetic identities applying for your products.   The verification process begins with consent from the SSN holder – and with eCBSV this consent is provided electronically rather than via a wet signature. Then, the SSN is checked against the SSA database to validate the SSN, name, and date of birth combination are or are not a match. The verification will also indicate if the SSN is listed as deceased with the SSA. Together, these factors can help flag whether or not an identity is synthetic.   By managing this process electronically, it is faster, more secure, and more efficient than before, offering an improved experience for consumers and the financial institutions that service them.   Layering solutions While eCBSV is an excellent step forward in the fight against the rising threat of synthetic identity fraud, a layered fraud mitigation strategy is still necessary. It’s only by layering solutions that financial institutions can accurately identify different types of fraud and provide them with the correct treatment, which is especially important when it comes to rooting out fraud when it’s already embedded in a portfolio.   To learn more about how Experian is helping to combat synthetic identity fraud and how eCBSV can benefit your financial institution, request a call. Request a call

Preventing fraud losses requires an understanding of each individual fraud type—including third-party, first-party, synthetic identity, and account takeover fraud—and how they differ from one another. It’s only with a multi-layered fraud strategy that businesses can adequately detect and treat each type of fraud while maintaining the customer experience. When’s the last time you reviewed your existing fraud strategy? Download infographic Review your fraud strategy

Over the last several weeks, I’ve shared articles about the problems surrounding third-party, first-party and synthetic identity fraud. To wrap up this series, I’d like to talk about account takeover fraud and how digital transformation has impacted it over the last year. What is account takeover fraud? Account takeover fraud is a form of identity theft that involves unauthorized access to a user’s online accounts to enable financial crimes. Criminals can obtain information in a number of ways, including the dark web, spyware and malware, and phishing to allow them to make unauthorized transactions with the user’s account. Fraudsters have made efforts to also gain control of mobile or email accounts so they can intercept one-time passwords or password change instructions to retain control of the account. Once fraudsters have control of one account, they can use it to access other personal information to breach additional accounts and graduate to full-scale identity theft. How does account takeover fraud impact me? Account takeover fraud is damaging to businesses and consumers. It leads to losses and well as resources invested to confirm fraud. The potential losses from account takeover fraud have spiked over the last year, in large part due to the opportunities created by the rapid increase of digital interactions and the influx of users interacting with merchants and financial institutions online for the first time. Aite research shows that 64% of financial institutions are seeing higher rates of ATO fraud attacks now than prior to the pandemic. – Trace Fooshee, Senior Analyst, Aite Group1 Account takeover can also be difficult to detect. Unlike credit card fraud where the true owner might quickly notice suspicious charges, an account takeover attack can go undetected for long periods of time. That’s because the criminal can change login and contact information, ensuring that the real accountholder doesn’t realize they’ve been compromised immediately. Solving the account takeover fraud problem A good account takeover fraud prevention strategy requires two things: frictionless customer experience and robust risk management. It’s clear that customers expect seamless interactions with merchants and lenders. At the same time, businesses need to be able to spot risky or suspicious behavior before a bad transaction occurs. That’s where a layered fraud management solution comes into play. With the right tools—including risk-based identity and device authentication and targeted step-up authentication—businesses can provide a good customer experience and only pull in staff for deeper investigations where necessary. With this strategy in place, businesses can easily recognize good customers and provide a more personalized experience, while at the same time combatting fraud – boosting growth and minimizing losses in the long run. I hope this series has helped provide insights into the different types of fraud and why each of them requires different treatment. To learn more about the risks of account takeover and how a layered fraud management solution can help protect your business and your customers, feel free to contact us. 1Key Trends Driving Fraud Transformation in 2021 and Beyond, Aite Group, December 2020

It’s obvious that 2020 was a year of unprecedented change and created brand new opportunities for fraud. In 2021, fraudsters will continue to iterate on new and old methods of attack, requiring businesses to remain flexible and proactive to prevent losses. We created the 2021 Future of Fraud Forecast to help businesses anticipate new types of fraud and prepare and protect consumers on the road ahead. Here are the trends we expect to see over the coming year: Putting a Face to Frankenstein IDs: Synthetic identity fraud will start to rely on “Frankenstein faces” for biometric verification. “Too Good to Be True” COVID Solutions: The promise of at-home test kits, vaccines and treatments will be used as means for sophisticated phishing and social engineering schemes. Stimulus Fraud Activity, Round Two: Fraudsters will take advantage of additional stimulus funding by using stolen data to intercept payments. Say ‘Hello’ to Constant Automated Attacks: Once the stimulus fraud attacks run their course, hackers will increasingly turn to automated methods. Survival of the Fittest for Small Businesses: In 2021, businesses with lackluster fraud prevention tools will suffer large financial losses. To learn more about how to protect your business and customers, download the Future of Fraud Forecast and check out Experian’s fraud prevention solutions. Future of Fraud Forecast Request a call

To combat the growing threat of synthetic identity fraud, Experian recently announced the launch of Sure ProfileTM, a revolutionary change to the credit profile that gives lenders peace of mind with Experian’s commitment to share in losses that result from an identity we’ve assured.   “Experian has always been a leader in combatting fraud, and with Sure Profile, we’re proud to deliver an industry-first fraud offering integrated into the credit profile that mitigates lender losses while protecting millions of consumers’ identities,” said Robert Boxberger, President of Decision Analytics, Experian North America.   Synthetic identity fraud is expected to drive $48 billion in annual online payment fraud losses by 2023. Between opportunistic fraudsters and a lack of a unified definition for synthetic identity theft it can be nearly impossible to detect—and therefore prevent—this type of fraud.   This breakthrough solution provides a composite history of a consumer’s identification, public record, and credit information and determines the risk of synthetic fraud associated with that consumer. It’s not just a fraud tool, it’s a comprehensive credit profile that utilizes premium data so lenders can make positive credit decisions.   Sure Profile leverages the capabilities of the Experian Ascend Identity PlatformTM and uses Experian’s industry-leading data assets and data quality to drive advanced analytics that set a higher level of protection for lenders. It’s powered by newly-developed machine learning and AI models. And it offers a streamlined approach to define and detect synthetic identities early in the originations process.   Most importantly, Sure Profile differentiates between real people and potentially risky applicants so lenders can increase application approvals with greater assurance and less risk.   “Experian can confidently define and help detect synthetic fraud. That's why we can help stop it,” said Craig Boundy, CEO of Experian North America. “Experian stands behind our data with assurance given to our clients. It’s better for lenders and it’s better for consumers.”   Sure Profile is a complement to our robust set of identity protection and fraud management capabilities, which are designed to address fraud and identity challenges including account openings, account takeovers, e-commerce fraud and more. This first-of-its kind profile is the future of underwriting and portfolio protection and it’s here now. Read press release Learn More About Sure Profile

This is the final part of a three part series of blog posts highlighting key focus areas for your response to the COVID-19 health crisis: Risk, Operations, Consumer Behavior, and Reporting and Compliance. For more information and the latest resources, please visit Look Ahead 2020, Experian’s COVID-19 resource center with the latest news and tools for our business partners as well as links to consumer resources and a risk simulator. To read the first post, click here. To read the second post, click here.  Consumer Behavior Changes Consumers will be hit hard by the economic fallout from the virus. They’ll need to manage available credit and monthly income to bridge the gap when many people are faced with lost wages, tips and the ability to work. Often, the only way to monitor these short-term risks is with trended credit attributes, from both traditional and alternative data sources. These attributes were developed to provide additional insights into how consumer credit usage is trending over time. Is their debt and spending increasing? Have their credit lines been reduced? Have they historically been a transactor but have now started revolving balances? Could the account be a synthetic identity, set up for intentional misuse of credit? The most predictive attributes available in these times can transform how you can identify and respond to risk.   Reporting and Compliance The regulatory environment is continuing to shift. There are continuous changes to compliance in the digital space for emerging channels and applications. There will be impacts to credit reporting and processes that may echo the response from other major natural disasters. The good news is that the framework developed for Comprehensive Capital Analysis and Review (CCAR) stress testing can be used to run scenarios and understand impacts. Although bank capital is very strong, additional regulation, such as the Current Expected Credit Losses (CECL), with all the latest shifts around compliance, may continue to increase the pressure on financial institutions. Having an adaptable process to forecast and stress-test scenarios to adjust capital requirements, especially in light of government fiscal and monetary stimulus measures, will be at the core of managing financial stability during a period of changes.   Conclusion We need to brace for the pending recession after the longest economic expansion in our lifetimes. These are the times where organizations may struggle to survive or thrive in the face of adversity. This is the time to act on your strategic plan, lean on your strategic partners, and leverage industry leading data and capabilities to soften the landing and thrive in the next phase of growth. Let’s prepare and get through this, together.   Learn More

For the last several years, as the global economy flourished, the opportunities created by removing friction and driving growth guided business strategies governing identity and fraud. The amount of profitable business available in a low-friction environment simply outweighed the fraud that could be mitigated with more stringent verification methods. Now that we’re facing a global crisis, it’s time to reconsider the approach that drove the economic boom that defined that last decade. Recognizing how economic changes impact fraud At the highest level, we separate fraud into two types; third party fraud and first party fraud. In simple terms, third party fraud involves the misuse of a real customer’s identity or unauthorized access to a real customer’s accounts or assets. First party fraud involves the use of an identity that the fraudster controls—whether it’s their own identity, a manipulated version of their own identity, or a synthetic identity that they have created. The important difference in this case is that the methods of finding and stopping third party fraud remain constant even in the event of an economic downturn – establish contact with the owner of the identity and verify whether the events are legitimate. Fraud tactics will evolve, and volumes increase as perpetrators also face pressure to generate income, but at the end of the day, a real person is being impersonated, and a victim exists that will confirm when fraud is taking place. Changes in first party fraud during an economic downturn are dramatically different and much more problematic. The baseline level of first party fraud using synthetic, manipulated and the perpetrator’s own identity continue, but they are augmented by real people facing desperate circumstances and existing “good” customers who over-extend while awaiting a turn-around. The problem is that there is no “victim” to confirm fraud is occurring, and the line between fraud (which implies intent) and credit default (which does not) becomes very difficult to navigate. With limited resources and pressures of their own, at some point lenders must try to distinguish deliberate theft from good customers facing bad circumstances and manage cases accordingly. The new strategy When times are good, it’s easier to build up a solid book of business with good customers. Employment rates are high, incomes are stable, and the risks are manageable. Now, we’re experiencing rapidly changing conditions, entire industries are disrupted, unemployment claims have skyrocketed and customers will need assistance and support from their lenders to help them weather the storm. This is a reciprocal relationship – it behooves those same lenders to help their customers get through to the other side. Lenders will look to limit losses and strengthen relationships. At the same time, they’ll need to reassess their existing fraud and identity strategies (among others) as every interaction with a customer takes on new meaning. Unexpected losses We’ve all been bracing for a recession for a while. But no one expected it to show up quite like it did. Consumers who have been model customers are suddenly faced with a complete shift in their daily life. A job that seemed secure may be less so, investments are less lucrative in the short term, and small business owners are feeling the pressure of a change in day-to-day commerce. All of this can lead to unexpected losses from formerly low-risk customers. As this occurs, it becomes more critical than ever to identify and help good customers facing grim circumstances and find different ways to handle those that have malicious intent. Shifting priorities When the economy was strong, many businesses were able to accept higher losses because those losses were offset by immense growth. Unfortunately, the current crisis means that some of those policies could have unforeseen consequences. For instance – the loss of the ability to differentiate between a good customer who has fallen on hard times and someone who’s been a bad actor from the start. Additionally, businesses need to revise their risk management strategies to align with shifting customer needs. The demand for emergency loans and will likely rise, while loans for new purchases like cars and homes will fall as consumers look to keep their finances secure. As the need to assist customers in distress rises and internal resources are stressed, it’s critical that companies have the right tools in place to triage and help customers who are truly in need. The good news The tools businesses like yours need to screen first party fraud already exist. In fact, you may already have the necessary framework in place thanks to an existing partnership, and a relatively simple process could prepare your business to properly screen both new and existing customers at every touchpoint. This global crisis is nowhere near over, but with the right tools, your business can protect itself and your customers from increased fraud risks and losses of all sorts – first party, stolen identities, or synthetic identities, and come out on the other side even stronger. Contact Experian for a review of your current fraud strategy to help ensure you’re prepared to face upcoming challenges. Contact us

Update: After closely monitoring updates from the WHO, CDC, and other relevant sources related to COVID-19, we have decided to cancel our 2020 Vision Conference. If you had the chance to experience tomorrow, today, would you take it? What if it meant you could get a glimpse into the future technology and trends that would take your organization to the next level? If you’re looking for a competitive edge – this is it. For more than 38 years, Experian’s premier conference has connected business leaders to data-driven ideas and solutions, fueling them to target new markets, grow existing customer bases, improve response rates, reduce fraud and increase profits. What’s in it for you? Everything to gain and nothing to lose. Are you a marketer? These sessions were made to drive your conversion rates to new heights: Know your customers via omnichannel marketing: Your customers are everywhere, but can you reach them? Learn how to drive business-expansion strategy, brand affinity and customer engagement across multiple channels. Plus, gain insight into connecting with customers via one-to-one messaging. By invitation only, the future of ITA marketing: An evolving landscape means marketers face new challenges in effectively targeting consumers while staying compliant. In this session, we’ll explore how you can leverage fair lending-friendly marketing data for targeting, analysis and measurement. Want the latest in technology trends? Dive into discussions to transform your customer experience: Credit in the age of technology transformation: Machine learning and artificial intelligence are the current darlings of big data, but the platform that drives the success of any big data endeavor is crucial. This session will dive into what happens behind the curtain. Put away your plastic – next-generation identity: An industry panel of experts discusses the newest digital identity and authentication capabilities – those in use today and also exciting solutions on the horizon. How about for the self-proclaimed data geeks? Analyze these: Alternative data: Listen in on an in-depth conversation about creative and impactful examples of using emerging data assets, such as alternative and consumer-permissioned data, for improved consumer inclusion, risk assessment and verification services. The next wave in open data: Experian will share their views on the potential of advanced data and models and how they benefit the global value chain – from consumer scores to business opportunities – regardless of local regulations. And the risk masters? Join us as we kick fraud to the curb: Understanding and tackling synthetic ID fraud: Synthetic IDs present a serious challenge for our entire industry. This expert panel will explore the current landscape – what’s working and what’s not, the expected impact of the next generation SSA eCBSV service, and best practice prevention methods. You are your ID – the new reality of biometrics: Consumers are becoming increasingly comfortable with biometrics. Just as CLEAR has transformed how we use our biometric identity to move through airports, sports venues and more, financial transactions can also be made friction-free. The point is, there’s something for everyone at Vision 2020. It’s not just another conference. Trade in stuffy tradeshow halls and another tri-fold brochure for the insights and connections you need to take your career and organization to the next level. Like technology itself, Vision 2020 promises to connect us, unify us and enable us all to create a better tomorrow. Join us for unique networking opportunities, one-on-one conversations with subject-matter experts and more than 50 breakout sessions with the industry’s most sought-after thought leaders.    

It may be a new decade of disruption, but one thing remains constant – the consumer is king. As such, customer experience (and continually evolving digital transformations necessary to keep up), digital expansion and all things identity will also reign supreme as we enter this new set of Roaring 20s. Here are seven of the top trends to keep tabs of through 2020 and beyond. 1. Data that does more – 100 million borrowers and counting Traditional, alternative, public record, consumer-permissioned, small business, big business, big, bigger, best – data has a lot of adjectives preceding it. But no matter how we define, categorize and collate data, the truth is there’s a lot of it that’s untapped, which is keeping financial institutions from operating at their max efficiency levels. Looking for ways to be bigger and bolder? Start with data to engage your credit-worthy consumer universe and beyond. Across the entire lending lifecycle, data offers endless opportunities – from prospecting and acquisitions to fraud and risk management. It fuels any technology solution you have or may want to implement over the coming year. Additionally, Experian is doing their part to create a more holistic picture of consumer creditworthiness with the launch of Experian LiftTM in November. The new suite of credit score products combines exclusive traditional credit, alternative credit and trended data assets, intended to help credit invisible and thin-file consumers gain access to fair and affordable credit. "We're committed to improving financial access while helping lenders make more informed decisions. Experian Lift is our latest example of this commitment brought to life,” said Greg Wright, Executive Vice President and Chief Product Officer for Experian Consumer Information Services. “Through Experian Boost, we're empowering consumers to play an active role in building their credit histories. And, with Experian Lift, we're empowering lenders to identify consumers who may otherwise be excluded from the traditional credit ecosystem,” he said. 2. Identity boom for the next generation Increasingly digital lifestyles have put personalization and frictionless transactions on hyperdrive. They are the expectation, not a nice-to-have. Having customer intelligence will become a necessary survival strategy for those in the market wanting to compete. Identity is not just for marketing purposes; it must be leveraged across the lending lifecycle and every customer interaction. Fragmented customer identities are more than flawed for decisioning purposes, which could potentially lead to losses. And, of course, the conversation around identity would be incomplete without a nod to privacy and security considerations. With the roll-out of the California Consumer Privacy Act (CCPA) earlier this month, we will wait to see if the other states follow suit. Regardless, consumers will continue to demand security and trust. 3. All about artificial intelligence and machine learning We get it – we all want the fastest, smartest, most efficient processes on limited – and/or shrinking – budgets. But implementing advanced analytics for your financial institution doesn’t have to break the bank. And, when it comes to delivering services and messaging to customers the way they want it, how to do that means digital transformation – specifically, leveraging big data and actionable analytics to evaluate risk, uncover industry intel and improve decisioning. One thing’s for certain, financial institutions looking to compete, gain traction and pull away from the competition in this next decade will need to do so by leveraging a future-facing partner’s expertise, platforms and data. AI and machine learning model development will go into hyperdrive to add accuracy, efficiency, and all-out speed. Real-time transactional processing is where it’s at. 4. Customer experience drives decisioning and everything Faster, better, more frictionless. 2020 and the decade will be all about making better decisions faster, catering to the continually quickening pace of consumer attention and need. Platforms and computing language aside, how do you increase processing speed at the same time as increasing risk mitigation? Implementing decisioning environments that cater to consumer preferences, coupled with best-in-class data are the first two steps to making this happen. This can facilitate instant decisioning within financial institutions. Looking beyond digital transformation, the next frontier is digital expansion. Open platforms enable financial institutions to readily add solutions from numerous providers so that they can connect, access and orchestrate decisions across multiple systems. Flexible APIs, single integrations and better strategy and design build the foundation of the framework to be implemented to enhance and elevate customer experience as it’s known today. 5. Credit marketing that keeps up with the digital, instant-gratification age Know your customer may be a common acronym for the financial services industry, but it should also be a baseline for determining whether to send a specific message to clients and prospects. From the basics, like prescreen, to omni-channel marketing campaigns, financial institutions need to leverage the communication channels that consumers prefer. From point of sale to mobile – there are endless possibilities to fit into your consumers’ credit journey. Marketing is clearly not a one-and-done tactic, and therefore multi-channel prequalification offers and other strategies will light the path for acquisitions and cross-sell/up-sell opportunities to come. By developing insights from customer data, financial institutions have a clear line of sight into determining optimal strategies for customer acquisition and increasing customer lifetime value. And, at the pinnacle, the modern customer acquisition engine will continue to help financial institutions best build, test and optimize their customer channel targeting strategies faster than ever before. From segmentation to deployment, and the right data across it all, today and tomorrow’s technology can solve many of financial organizations’ age-old customer acquisition challenges. 6. Three Rs: Recession, regulatory and residents of the White House Last March, the yield curve inverted for the first time since 2007. Though the timing of the next economic correction is debated, messaging is consistent around making a plan of action now. Whether it’s arming your collections department, building new systems, updating existing systems, or adjusting rules and strategy, there are gaps every organization needs to fill. By leveraging the stability of the economy now, financial institutions can put strategies in place to maximize profitability, manage risk, reduce bad debt/charge-offs, and ensure regulatory compliance among their list of to-do’s, ultimately resulting in a more efficient, better-performing program. Also, as we near the election later this year, the regulatory landscape will likely change more than the usual amount. Additionally, we will witness the first accounts of what CECL looks like for SEC-filing financial institutions (and if that will suggest anything for how non-SEC-filing institutions may fare as their deadline inches closer), as well as see the initial implications of the CCPA roll out and whether it will pave a path for other states to follow. As system sophistication continues to evolve, so do the risks (like security breaches) and new regulatory standards (like GDPR and CCPA) which provide reasons for organizations to transform. 7. Focus on fraud (in all forms) With evolving technology, comes evolved fraudsters. Whether it’s loyalty and rewards programs, account openings, breaches, there are so many angles and entry points. Synthetic identity fraud is the fastest-growing type of financial crime in the United States. The cost to businesses is estimated to grow to $1.2 billion by 2020, according to the Aite Group. To ensure the best protection for your business and your customers, a layered, risk-based approach to fraud management provides the highest levels of confidence in the industry. Balance is key – while being compliant with regulatory requirements and conscious of user experience, ensuring consumers’ peace of mind is priority one. Not a new trend, but recognizing fraud and recognizing good consumers will save continue to save financial institutions money and reputational harm, driving significant improvement in key performance indicators. Using the right data (and aggregating multiple data sets) and digital device intelligence tools is the one-two punch to protect your bottom line. For all your needs in 2020 and throughout the next decade, Experian has you covered. Learn more

If you’ve been on the dating scene in the last few years, you’re probably familiar with ghosting. For those of you who aren’t, I’ll save you the trip to Urban Dictionary. “Ghosting” is when the person you’re dating disappears. No calls. No texts. No DMs. They just vanish, never to be heard from again. As troublesome as this can be, there’s a much more nefarious type of ghosting to be wary of – credit ghosting. Wait, what’s credit ghosting? Credit ghosting refers to the theft of a deceased person’s identity. According to the IRS, 2.5 million deceased identities are stolen each year. The theft often occurs shortly after someone dies, before the death is widely reported to the necessary agencies and businesses. This is because it can take months after a person dies before the Social Security Administration (SSA) and IRS receive, share, or register death records. Additionally, credit ghosting thefts can go unnoticed for months or even years if the family of the deceased does not check their credit report for activity after death. Opportunistic fraudsters check obituaries and other publicly available death records for information on the deceased. Obituaries often include a person’s birthday, address or hometown, parents’ names, occupation, and other information regularly used in identity verification. With this information fraudsters can use the deceased person’s identity and take advantage of their credit rating rather than taking the time to build it up as they would have to with other types of fraud. Criminals will apply for credit cards, loans, lines of credit, or even sign up for a cell phone plan and rack up charges before disappearing. Where did this type of identity theft come from? Credit ghosting is the result of a few issues. One traces back to a discrepancy noted by the Social Security’s inspector general. In an audit, they found that 6.5 million Social Security numbers for people born before June 16, 1901, did not have a date of death on record in the administration’s Numident (numerical identification) system – an electronic database containing Social Security number records assigned to each citizen since 1936. Without a date of death properly noted in the database, government agencies and other entities inquiring won’t necessarily know an individual is deceased, making it possible for criminals to implement credit ghosting schemes. Additionally, unreported deaths leave further holes in the system, leading to opportunity for fraudsters. When financial institutions run checks on the identity information supplied by a fraudster, it can seem legitimate. If the deceased’s credit is in good standing, the fraudster now appears to be a good customer—much like a synthetic identity—but now with the added twist that all of the information is from the same person instead of stitched together from multiple sources. It can take months before the financial institution discovers that the account has been compromised, giving fraudsters ample time to bust out and make off with the funds they’ve stolen. How can you defend against credit ghosting? Luckily, unlike your dating pipeline, there are ways to guard against ghosting in your business’ pipeline. Frontline Defense: Start by educating your customers. It’s never pleasant to consider your own passing or that of a loved one, but it’s imperative to have a plan in place for both the short and long term. Remind your customers that they should contact lenders and other financial institutions in the event of a death and continue monitoring those accounts into the future. Relatives of the deceased don’t tend to check credit reports after an estate has been settled. If the proper steps aren’t taken by the family to notify the appropriate creditors of the death, the deceased flag may not be added to their credit report before the estate is closed, leaving the deceased’s information vulnerable to fraud. By offering your customers assistance and steps to take, you can help ensure that they’re not dealing with the fallout of credit ghosting—like dealing with calls from creditors following up after the fraudster’s bust-out—on top of grieving. Backend Defense: Ensure you have the correct tools in place to spot credit ghosts when they try to enter your pipeline. Experian’s Fraud Shield includes high risk indicators and provides a deceased indicator flag so you can easily weed them out. Additionally, you can track other risk indicators like previous uses of a particular Social Security number and identify potential credit-boosting schemes. Speak to an Experian associate today about how you can increase your defenses against credit ghosting. Let's talk

As credit unions look to grow their loan portfolios and acquire new members, improving the member experience is critical to the process and remains a primary focus. In order to compete in the lending universe, financial tools that empower and enable a positive experience are critical to meeting these requirements. That being said, an Experian study reveals that 90% of executives agree that embracing a digital transformation is critical to providing excellent experiences. In this connected, data-driven world, digital transformations are opening the door for better and greater opportunities. With data and analytics, credit unions will be able to gain data-driven insights, to identify key channels of member engagement, create complete member views and further maximize growth and lending strategies. Data-driven organizations that can anticipate their members’ needs and preferences will be able to deepen relationships and maintain relevance – gaining an edge in a highly-competitive environment. The digital revolution is happening now – and it’s time for future-focused credit unions to adapt to changing expectations. However, according to an Experian report, 39% of organizations lack the customer insight and data required to provide these member experiences. That’s where Experian comes in. Join Mike Thibodeaux, Experian’s Senior Director, Fraud and Identity Sales Engineers, for a breakout session at CUNA Lending 2019 on Monday, Nov. 4 at 1:45 p.m. or 3:15 p.m. He will take a closer look at best practices and digital tools that credit unions can use to maximize credit union membership growth, while managing and mitigating fraud. The discussion will revolve around multiple topics, critical to the member experience conversation, including: Increasing profitable loan growth Lending deeper to the underserved Levering digital services and tools for your credit union Minimizing fraud activity (specifically synthetic identity fraud) and credit losses Enhancing and maintaining positive member experiences Experian is excited to once again take part in the 2019 CUNA Lending Council Conference, an event that brings together the credit union movement’s best and brightest in lending. If you’re attending, make sure to engage and connect with our thought leaders at our booth and learn how we’re dedicated to helping credit unions of all sizes advance their decisioning and services. Our team is committed to being a trusted partner – providing solutions that enable you to further grow, protect and serve within your field of membership. Learn More

Experian has been named one of the 10 participants, and only credit bureau, in the initial rollout of the SSA's new eCBSV service.

In 2011, data scientists and credit risk managers finally found an appropriate analogy to explain what we do for a living. “You know Moneyball? What Paul DePodesta and Billy Beane did for the Oakland A’s, I do for XYZ Bank.” You probably remember the story: Oakland had to squeeze the most value out of its limited budget for hiring free agents, so it used analytics — the new baseball “sabermetrics” created by Bill James — to make data-driven decisions that were counterintuitive to the experienced scouts. Michael Lewis told the story in a book that was an incredible bestseller and led to a hit movie. The year after the movie was made, Harvard Business Review declared that data science was “the sexiest job of the 21st century.” Coincidence?   The importance of data Moneyball emphasized the recognition, through sabermetrics, that certain players’ abilities had been undervalued. In Travis Sawchik’s bestseller Big Data Baseball: Math, Miracles, and the End of a 20-Year Losing Streak, he notes that the analysis would not have been possible without the data. Early visionaries, including John Dewan, began collecting baseball data at games all over the country in a volunteer program called Project Scoresheet. Eventually they were collecting a million data points per season. In a similar fashion, credit data pioneers, such as TRW’s Simon Ramo, began systematically compiling basic credit information into credit files in the 1960s. Recognizing that data quality is the key to insights and decision-making and responding to the demand for objective data, Dewan formed two companies — Sports Team Analysis and Tracking Systems (STATS) and Baseball Info Solutions (BIS). It seems quaint now, but those companies collected and cleaned data using a small army of video scouts with stopwatches. Now data is collected in real time using systems from Pitch F/X and the radar tracking system Statcast to provide insights that were never possible before. It’s hard to find a news article about Game 1 of this year’s World Series that doesn’t discuss the launch angle or exit velocity of Eduardo Núñez’s home run, but just a couple of years ago, neither statistic was even measured. Teams use proprietary biometric data to keep players healthy for games. Even neurological monitoring promises to provide new insights and may lead to changes in the game. Similarly, lenders are finding that so-called “nontraditional data” can open up credit to consumers who might have been unable to borrow money in the past. This includes nontraditional Fair Credit Reporting Act (FCRA)–compliant data on recurring payments such as rent and utilities, checking and savings transactions, and payments to alternative lenders like payday and short-term loans. Newer fintech lenders are innovating constantly — using permissioned, behavioral and social data to make it easier for their customers to open accounts and borrow money. Similarly, some modern banks use techniques that go far beyond passwords and even multifactor authentication to verify their customers’ identities online. For example, identifying consumers through their mobile device can improve the user experience greatly. Some lenders are even using behavioral biometrics to improve their online and mobile customer service practices.   Continuously improving analytics Bill James and his colleagues developed a statistic called wins above replacement (WAR) that summarized the value of a player as a single number. WAR was never intended to be a perfect summary of a player’s value, but it’s very convenient to have a single number to rank players. Using the same mindset, early credit risk managers developed credit scores that summarized applicants’ risk based on their credit history at a single point in time. Just as WAR is only one measure of a player’s abilities, good credit managers understand that a traditional credit score is an imperfect summary of a borrower’s credit history. Newer scores, such as VantageScore® credit scores, are based on a broader view of applicants’ credit history, such as credit attributes that reflect how their financial situation has changed over time. More sophisticated financial institutions, though, don’t rely on a single score. They use a variety of data attributes and scores in their lending strategies. Just a few years ago, simply using data to choose players was a novel idea. Now new measures such as defense-independent pitching statistics drive changes on the field. Sabermetrics, once defined as the application of statistical analysis to evaluate and compare the performance of individual players, has evolved to be much more comprehensive. It now encompasses the statistical study of nearly all in-game baseball activities.   A wide variety of data-driven decisions Sabermetrics began being used for recruiting players in the 1980’s. Today it’s used on the field as well as in the back office. Big Data Baseball gives the example of the “Ted Williams shift,” a defensive technique that was seldom used between 1950 and 2010. In the world after Moneyball, it has become ubiquitous. Likewise, pitchers alter their arm positions and velocity based on data — not only to throw more strikes, but also to prevent injuries. Similarly, when credit scores were first introduced, they were used only in originations. Lenders established a credit score cutoff that was appropriate for their risk appetite and used it for approving and declining applications. Now lenders are using Experian’s advanced analytics in a variety of ways that the credit scoring pioneers might never have imagined: Improving the account opening experience — for example, by reducing friction online Detecting identity theft and synthetic identities Anticipating bust-out activity and other first-party fraud Issuing the right offer to each prescreened customer Optimizing interest rates Reviewing and adjusting credit lines Optimizing collections   Analytics is no substitute for wisdom Data scientists like those at Experian remind me that in banking, as in baseball, predictive analytics is never perfect. What keeps finance so interesting is the inherent unpredictability of the economy and human behavior. Likewise, the play on the field determines who wins each ball game: anything can happen. Rob Neyer’s book Power Ball: Anatomy of a Modern Baseball Game quotes the Houston Astros director of decision sciences: “Sometimes it’s just about reminding yourself that you’re not so smart.”  

First-party fraud is an identity-centric risk that changes over time. And the fact that no one knows the true size of first-party fraud is not the problem. It’s a symptom. First-party fraud involves a person making financial commitments or defaulting on existing commitments using their own identity, a manipulated version of their own identity or a synthetic identity they control. With the identity owner involved, a critical piece of the puzzle is lost. Because fraud “treatments” tend to be all-or-nothing and rely on a victim, the consequences of applying traditional fraud strategies when first-party fraud is suspected can be too harsh and significantly damage the customer relationship. Without feedback from a victim, first-party fraud hides in plain sight — in credit losses. As a collective, we’ve created lots of subsets of losses that nibble around the edges of first-party fraud, and we focus on reducing those. But I can’t help thinking if we were really trying to solve first-party fraud, we would collectively be doing a better job of measuring it. As the saying goes, “If you can’t measure it, you can’t improve it.” Because behaviors exhibited during first-party fraud are difficult to distinguish from those of legitimate consumers who’ve encountered catastrophic life events, such as illness and unemployment, individual account performance isn’t typically a good measurement. First-party fraud is a person-level event rather than an account-level event and needs to be viewed as such. So why does first-party fraud slip through the cracks? Existing, third-party fraud prevention tools aren’t trained to detect it. Underwriting relies on a point-in-time assessment, leaving lenders blind to intentions that may change after booking. When first-party fraud occurs, the different organizations that suffer losses attach different names to it based on their account-level view. It’s hidden in credit losses, preventing you from identifying it for future analysis. As an industry, we aren’t going to be able to solve the problem of first-party fraud as long as three different organizations can look at an individual and declare, “Never pay!” “No. Bust-out!” “No! Charge-off!” So, what do we need to stop doing? Stop thinking that it’s a different problem based on when you enter the picture. Whether you opened an account five years ago or 5 minutes ago doesn’t change the problem. It’s still first-party fraud if the person who owns the identity is the one misusing it. Stop thinking that the financial performance of an account you maintain is the only relevant data. And what do we need to start doing? See and treat first-party fraud as a continuous Leverage machine learning techniques and robust data (including your own observations) to monitor for emerging risk over Apply multiple levels of treatments to respond and tighten controls/reduce exposure as risk Define first-party fraud using a broader set of elements beyond your individual observations.

Identity-related fraud exposure and losses are increasing, and the underlying schemes are becoming more complex. To make better decisions on the need for step-up authentication in this dynamic environment, you should take a layered approach to the services you need. Some of these services include: Identity verification and reverification checks for ongoing reaffirmation of your customer identity data quality and accuracy. Targeted identity risk scores and underlying attributes designed to isolate identity theft, first-party fraud and synthetic identity. Layered, passive or more active authentication, such as document verification, biometrics, knowledge-based authentication and alternate data sources. Bad guys are more motivated, and they’re getting better at identity theft and synthetic identity attacks. Fraud prevention needs to advance as well. Future-proof your investments. More fraud prevention strategies to consider>