Tag: fraud prevention

Any responsible business manager knows that protection business and client data is a vital part of running a success organization. Now a new report identifies key factors that can improve a company’s ability to avoid hacks and prevent data breaches. And here’s the good news: These tactics really work. During 2018, the number of personal records exposed in data breaches soared — a total of 446.5 million pieces of data – an increase that was more than double the number of records breached during 2017, according to the Identity Theft Resource Center. The business, healthcare and financial sectors were the top three sectors hit, with hacking being the most common form of attack. But among the companies surveyed in the latest annual study sponsored by Experian Data Breach Resolution, there are important signs of hope. Despite the startling increase in the number of records stolen by data thieves – a gain of 126 percent – the number of survey participants reporting a breach increased by just 5 percent. This trend demonstrates that while hackers might be grabbing more data when they do manage to crack a database, the smaller increase in total breaches reported in the survey indicate that a growing number of institutions are improving their abilities to fend off cybercriminals. What’s their secret?  To encourage more effective strategies to handle and prevent breaches, “Is Your Company Ready for a Big Data Breach?” uncovers several important lessons learned from companies that are successfully insulating themselves – and their customers – from data theft.  Prevention is the best response: The overarching lesson that researches found is that an effective data breach response plan starts with preventing breaches in the first place, rather than reacting after customer and business data has been stolen. Of the 643 U.S. business people surveyed who work on privacy, compliance and IT security, 29 percent reported that their organizations had prevented any breach involving more than 1,000 records for the past two years. Rate your plan: The Ponemon researchers found that the percentage of companies that find their data breach response plans to be very effective increased from 42 percent in 2016 to 52 percent in 2018. Not surprisingly, more people at organizations that didn’t report a breach rated their response plans as effective – 62 percent – while 45 percent of those at companies that suffered data theft nonetheless felt their plans were effective.  Money matters: Ponemon researchers found that more investment in cybersecurity technology seemed to pay off. One of the most common factors among companies that prevented breaches was increased spending on technology to detect and prevent attacks. Of companies that prevented breaches, 73 percent increased their tech spending, versus 61 percent of those companies that were breached.  No train, no gain: An even bigger improvement came from training employees and making them aware of privacy and data protection issues and practices. The likelihood of a data breach was significantly reduced when awareness training specifically targeted employees and other stakeholders in business processes who work with or access sensitive or confidential personal data. At organizations that implemented training, 79 percent avoided a breach versus 69 percent of those that were hacked.  Cybersafety starts at the top: Executive engagement also matters. Making data security a priority among C-suite executives and corporate board members translates into keeping records safer. The study found that 54 percent of executives and 39 percent of directors were knowledgeable and engaged in planning data breach responses. At companies that were breached, 49 percent of executives and 32 percent of board members were involved with cybersecurity response.  Sharing is caring: Another key finding in preventing breaches is that organizations that sharing their insights and experiences in handling and preventing breaches improved their cybersafety. Operations that participated in learning about data protection and hacks from industry peers and government agencies were more likely to avoid a breach – 59 percent of those who joined sharing programs didn’t suffer an attack, while 46 percent of those participating experienced a breach.  Cybersafety is a process: Finally, organizations that want to stay cyber-safe might want to adopt the Boy Scout motto, “Be Prepared.” Companies that successfully prevented a data breach took several preventive measures to guard against attacks. That includes conducting regular reviews of physical security and access to confidential information, instituting third-party cybersecurity assessments, making data breach response part of their business continuity plans and creating backup websites that can be activated to provide content and information should a breach occur. For the study, Ponemon researchers surveyed 643 professionals working in information technology and security, compliance and privacy who deal with data breach response plans in their organizations. The entire comprehensive survey of cybersecurity practices – “Sixth Annual Study: Is Your Company Ready for a Big Data Breach?” – is available to download now. The Ponemon Institute, headquartered in Traverse City, Michigan, conducts independent research on data protection and emerging information technologies. Experian Data Breach Resolution helps businesses of all sizes manage the risk of fines, customer loss, negative press and litigation due to a breach of data, and is a subsidiary of Experian, the global leader in consumer and business credit reporting and marketing service operating in 80 countries. Download the Ponemon study Learn more about our Data Breach solutions

How can fintech companies ensure they’re one step ahead of fraudsters? Kathleen Peters discusses how fintechs can prepare for success in fraud prevention.

As our society becomes ever more dependent on everything mobile, criminals are continually searching for and exploiting weaknesses in the digital ecosystem, causing significant harm to consumers, businesses and the economy.  In fact, according to our 2018 Global Fraud & Identity Report, 72 percent of business executives are more concerned than ever about the impact of fraud. Yet, despite the awareness and concern, 54 percent of businesses are only “somewhat confident” in their ability to detect fraud. That needs to change, and it needs to change right away.  Our industry has thrived by providing products and services that root out bad transactions and detect fraud with minimal consumer friction. We continue to innovate new ways to authenticate consumers, apply new cloud technologies, machine learning, self-service portals and biometrics. Yet, the fraud issue still exists. It hasn’t gone away. How do we provide effective means to prevent fraud without inconveniencing everyone in the process? That’s the conundrum. Unfortunately, a silver bullet doesn’t exist. As much as we would like to build a system that can detect all fraud, eliminate all consumer friction, we can’t. We’re not there yet. As long as money has changed hands, as long as there are opportunities to steal, criminals will find the weak points – the soft spots.  That said, we are making significant progress. Advances in technology and innovation help us bring new solutions to market more quickly, with more predictive power than ever, and the ability to help clients to turn  these services on in days and weeks. So, what is Experian doing? We’ve been in the business of fraud detection and identity verification for more than 30 years. We’ve seen fraud patterns evolve over time, and our product portfolio evolves in lock-step to counter the newest fraud vectors. Synthetic identity fraud, loan stacking, counterfeit, identity theft; the specific fraud attacks may change but our solution stack counters each of those threats. We are on a continuous innovation path, and we need to be. Our consumer and small business databases are unmatched in the industry for quality and coverage, and that is an invaluable asset in the fight against fraud. It used to be that knowing something about a person was the same as authenticating that same person. That’s just not the case today. But, just because I may not be the only person who knows where I live, doesn’t mean that identity information is obsolete. It is incredibly valuable, just in different ways today. And that’s where our scientists come into their own, providing complex predictive solutions that utilize a plethora of data and insight to create the ultimate in predictive performance. We go beyond traditional fraud detection methods, such as knowledge-based authentication, to offer a custom mix of passive and active authentication solutions that improve security and the customer experience. You want the latest deep learning techniques? We have them. You want custom models scored in milliseconds alongside your existing data requests. We can do that. You want a mix of cloud deployment, dedicated hosted services and on-premise? We can do that too. We have more than 20 partners across the globe, creating the most comprehensive identity management network anywhere. We also have teams of experts across the world with the know how to combine Experian and partner expertise to craft a bespoke solution that is unrivaled in detection performance. The results speak for themselves: Experian analyzes more than a billion credit applications per year for fraud and identity, and we’ve helped our clients save more than $2 billion in annual fraud losses globally. CrossCore™, our fraud prevention and identity management platform, leverages the full breadth of Experian data as well as the data assets of our partners. We execute machine learning models on every decision to help improve the accuracy and speed with which decisions are made. We’ve seen CrossCore machine learning result in a more than 40 percent improvement in fraud detection compared to rules-based systems. Our certified partner community for CrossCore includes only the most reputable leaders in the fraud industry. We also understand the need to expand our data to cover those who may not be credit active. We have the largest and most unique sets of alternative credit data among the credit bureaus, that includes our Clarity Services and RentBureau divisions. This rich data helps our clients verify an individual’s identity, even if they have a thin credit file. The data also helps us determine a credit applicant’s ability to pay, so that consumers are empowered to pursue the opportunities that are right for them. And in the background, our models are constantly checking for signs of fraud, so that consumers and clients feel protected. Fraud prevention and identity management are built upon a foundation of trust, innovation and keeping the consumer at the heart of every decision. This is where I’m proud to say that Experian stands apart. We realize that criminals will continue to look for new ways to commit fraud, and we are continually striving to stay one step ahead of them. Through our unparalleled scale of data, partnerships and commitment to innovation, we will help businesses become more confident in their ability to recognize good people and transactions, provide great experiences, and protect against fraud.

  Keeping your customers happy is critical to success. And while reducing fraud is imperative, it shouldn’t detract from a positive customer experience. Here are 3 fraud detection and prevention strategies that can help you reduce fraud and protect (and retain) customers. Use customer-centric strategies — Recognizing legitimate customers online is more important than ever, particularly since the web’s built-in anonymity makes it a breeding ground for scammers and fraudsters. Balance fraud prevention and the customer experience — When implementing security protocols, consider consumers’ fluctuating and potentially diminishing tolerance levels for security protocols. Embrace new fraud protection technologies — Multilayered approaches should include data-driven, artificial intelligence–powered systems that will recognize customers while keeping their transactions stress-free. Fraud prevention shouldn’t discourage honest customers from buying, but it should instill confidence and strengthen the customer relationship. Learn more>

Believe it or not, 66% of consumers want to see some visible signs of security and barriers when accessing their accounts so they can be sure that a transaction is more secure. Other takeaways from our 2018 Global Fraud and Identity Report: Nearly 3/4 of surveyed businesses cite fraud as growing over the past 12 months. 30% of surveyed businesses are experiencing more fraud losses year-over-year. While 83% of businesses believe that their fraud solutions are scalable, cost is the biggest obstacle to adopting new tactics. There’s a delicate balance in delivering a digital experience that instills confidence while allowing for easy and convenient account access. It’s not easy to deliver both — but it is possible.

Although it’s hard to imagine, some synthetic identities are being used for purposes other than fraud. Here are 3 types of common synthetic identities and why they’re created: Bad — To circumvent lag times and delays in establishing a legitimate identity and data footprint. Worse — To “repair” credit, hoping to start again with a higher credit rating under a new, assumed identity. Worst — To commit fraud by opening various accounts with no intention of paying those debts or service fees. While all these synthetic identity types are detrimental to the ecosystem shared by consumers, institutions and service providers, they should be separated by type — guiding appropriate treatment. Learn more in our new white paper produced with Whitepages Pro, Fighting synthetic identity theft: getting beyond Social Security numbers. Download now>

The business case for identity verification and risk assessment tools is most compelling when it includes a broad range of both direct and indirect factors. Here are 3 indirect measures we suggest you consider: Customer experience improvement — With 72% of businesses focused on service, according to Forrester Research,* the value of reduced friction can’t be overstated Reputation and brand protection — The monetary cost of fraud losses can be high, but the impact on customer relationships and brand integrity can be even higher. Compliance — Noncompliance costs an average of 2.65 times more than investing in a technology-based compliance solution. Justifying investment in fraud prevention technology can be challenging. A business case built on the right data can pave the way to upgrading your identity verification and risk assessment technology. Learn more in our buyer's guide>

Identify your customers to spot fraud. It’s a simple concept, but it’s not so simple to do. In our 2018 Global Fraud and Identity Report, we found that consumers expect to be recognized and welcomed wherever and whenever they do business. Here are some other interesting findings regarding recognition and fraud: 66% of consumers surveyed appreciate seeing visible security when doing business online because it makes them feel protected. 75% of businesses want security measures that have little impact on consumers. More than half of businesses still rely on passwords as their top form of authentication. Even though you can’t see your customers face-to-face, the importance of being recognized can’t be overemphasized. How well are you recognizing your customers? Can you recognize your customers?

From malware and phishing to expansive distributed denial-of-service attacks, the sophistication, scale and impact of cyberattacks have evolved significantly in recent years. Mitigate risk by employing these best practices: Manage third-party risks. Regularly review response plans. Opt in to software updates. Educate, educate, educate. Organizations must adopt stronger, more advanced technical solutions to protect sensitive data. While enhanced technology is necessary for defending against data breaches, it can’t work independently. Learn more

While it’s important to recognize synthetic identities when they knock on your door, it’s just as important to conduct regular portfolio checkups. Every circumstance has unique parameters, but the overarching steps necessary to mitigate fraud from synthetic IDs remain the same: Identify current and near-term exposure using targeted segmentation analysis. Apply technology that alerts you when identity data doesn’t add up. Differentiate fraudulent identities from those simply based on bad data. Review front- and back-end screening procedures until they satisfy best practices. Achieve a “single customer view” for all account holders across access channels — online, mobile, call center and face-to-face. With the right set of analytics and decisioning tools, you can reduce exposure to fraud and losses stemming from synthetic identity attacks at the beginning and across the Customer Life Cycle. Learn more

Global Fraud and Identity Report 2018 Customer recognition. Convenience. Trust. Fraud risk. We obtained input from more than 5,500 consumers and 500 businesses worldwide on these priorities for our Global Fraud and Identity Report 2018. Top takeaways include: Your customers expect you to protect them. Are you meeting this need? Spot fraud by recognizing your customers. Can you identify yours? While perfect fraud prevention shouldn't undermine customer happiness, we can't forget that fraud victims aren’t happy customers. Businesses recognize the importance of trust - and the need for technology to enable it. Most businesses tend to demonstrate suspicion when it comes to preventing fraud, following a route of detection rather than permission or trust. This leads to lost sales and damages that customer’s lifetime value. There’s a better approach. Read the full report>

The multitude of modern fraud strategies available today necessitates applying an appropriate level of confidence to increase the likelihood of catching fraudsters without disrupting legitimate customers’ experiences. This approach is known as “rightsizing” your fraud solution. Here’s how fraud detection rates can be improved while reducing the number of false positives and disruption of legitimate customers: A right-size approach means tackling your fraud problem with a highly tailored solution that enables your business rather than crippling it. Next week, we’ll discuss this forward-looking approach to fighting fraud, or you can jump ahead and read our latest tip sheet. Tip sheet>

Traditional verification and validation parameters alone are not enough to stop identity fraud. Fortunately, there are many emerging trends and best practices for modern fraud and identity strategies: Applying right-sized fraud and identity proofing solutions to reduce user friction and manage fraud risk appropriately. Maintaining a universal user view by employing diverse breadth and depth of data assets and applied analytics. Expanding the user view through a blended ecosystem by collaborating with vendors, peer agencies, and partners in identity and fraud management. The future of identity proofing is more than just verifying individual identities. Check out our tip sheet linked below for more strategies. Modernize your fraud and identity strategies>

Sophisticated criminals work hard to create convincing, verifiable personas they can use to commit fraud. Here are the 3 main ways fraudsters manufacture synthetic IDs: Credit applications and inquiries that build a synthetic credit profile over time. Exploitation of authorized user processes to take over or piggyback on legitimate profiles. Data furnishing schemes to falsify regular credit reporting agency updates. Fraudsters are highly motivated to innovate their approaches rapidly. You need to implement a solution that addresses the continuing rise of synthetic IDs from multiple engagement points. Learn more

Despite rising concerns about identity theft, most Americans aren’t taking basic steps to make it harder for their information to be stolen, according to a survey Experian conducted in August 2017: Nearly 3 in 4 consumers said they’re very or somewhat concerned their email, financial accounts or social media information could be hacked. This is up from 69% in a similar survey Experian conducted in 2015. Nearly 80% of survey respondents are concerned about using a public Wi-Fi network. Yet, barely half said they take the precaution of using a password-protected Wi-Fi network when using mobile devices. 59% of respondents are annoyed by safety precautions needed to use technology — up 12% from 2015. When your customer’s identity is stolen, it can negatively impact the consumer and your business. Leverage the tools and resources that can help you protect both. Protect your customers and your business>