Tag: identity fraud

March is a time when the idea of luck is in the air, with St. Patrick’s Day celebrations and hopeful thoughts of pots of gold at the end of the rainbow. But while the "Luck of the Irish" may be a fun idea, scammers take advantage of this sentiment to exploit people through fraudulent lottery scams and prize schemes. Take, for example, the so-called "Luck of the Irish" scams that flood inboxes and phone lines every March. You might receive a message claiming you have won the "Irish National Lottery" or another grand prize, but there is a catch—you need to pay fees or provide sensitive personal information to claim it. Before you know it, the scammers have vanished with your money or used your data for further fraud. Red flags of lottery scams Financial institutions can help protect clients by educating them on the warning signs of fraudulent lottery schemes. According to the FTC website, here are three clear indicators that a prize is too good to be true: You must pay to claim your winnings – Legitimate lotteries do not require winners to pay taxes, fees, or handling charges upfront. If you are asked to send money to claim a prize, it is a scam. You never entered the lottery – If you did not buy a ticket or enter a sweepstake, you cannot win. Any message saying otherwise is a red flag. They ask for personal or financial information – No legitimate lottery will ask for your Social Security number, bank details, or credit card information to process winnings. How scammers operate Lottery scammers use a variety of tactics to trick victims, including: Impersonating well-known brands or government agencies to appear credible. Sending fake checks that later bounce after victims have sent money. Using high-pressure tactics, such as claiming the offer is time sensitive. Requesting payment through difficult-to-trace methods like gift cards, wire transfers, or cryptocurrency. How financial institutions can help clients stay safe Banks and financial institutions play a critical role in protecting their clients from falling victim to lottery scams. Here is how they can help: Educate clients: Provide fraud awareness materials explaining common scams, red flags, and safe financial practices. Implement transaction monitoring: Monitor for suspicious transactions, especially those involving large wire transfers or unusual payments to unknown entities. Encourage multi-factor authentication: Strengthening account security can prevent unauthorized transactions if scammers obtain a victim’s personal information. Offer a safe reporting channel: Encourage clients to report suspected scams so the institution can take preventive action and share warnings with others. Final thoughts Winning the lottery may be a dream for many, but no real jackpot comes with a catch. Financial institutions can be the first line of defense by helping clients recognize scams before they lose money. The best approach? Remind clients that the only "pot of gold" worth chasing is the one they have earned and safeguarded through smart financial habits. And finally, check out this educational tune with a catchy rhythm, designed to raise awareness about scams. Learn more

As Valentine’s Day approaches, hearts will melt, but some will inevitably be broken by romance scams. This season of love creates an opportune moment for scammers to prey on individuals feeling lonely or seeking connection. Financial institutions should take this time to warn customers about the heightened risks and encourage vigilance against fraud. In a tale as heart-wrenching as it is cautionary, a French woman named Anne was conned out of nearly $855,000 in a romance scam that lasted over a year. Believing she was communicating with Hollywood star Brad Pitt; Anne was manipulated by scammers who leveraged AI technology to impersonate the actor convincingly. Personalized messages, fabricated photos, and elaborate lies about financial needs made the scam seem credible. Anne’s story, though extreme, highlights the alarming prevalence and sophistication of romance scams in today’s digital age. According to the Federal Trade Commission (FTC), nearly 70,000 Americans reported romance scams in 2022, with losses totaling $1.3 billion—an average of $4,400 per victim. These scams, which play on victims’ emotions, are becoming increasingly common and devastating, targeting individuals of all ages and backgrounds. Financial institutions have a crucial role in protecting their customers from these schemes. The lifecycle of a romance scam Romance scams follow a consistent pattern: Feigned connection: Scammers create fake profiles on social media or dating platforms using attractive photos and minimal personal details. Building trust: Through lavish compliments, romantic conversations, and fabricated sob stories, scammers forge emotional bonds with their targets. Initial financial request: Once trust is established, the scammer asks for small financial favors, often citing emergencies. Escalation: Requests grow larger, with claims of dire situations such as medical emergencies or legal troubles. Disappearance: After draining the victim’s funds, the scammer vanishes, leaving emotional and financial devastation in their wake. Lloyds Banking Group reports that men made up 52% of romance scam victims in 2023, though women lost more on average (£9,083 vs. £5,145). Individuals aged 55-64 were the most susceptible, while those aged 65-74 faced the largest losses, averaging £13,123 per person. Techniques scammers use Romance scammers are experts in manipulation. Common tactics include: Fabricated sob stories: Claims of illness, injury, or imprisonment. Investment opportunities: Offers to “teach” victims about investing. Military or overseas scenarios: Excuses for avoiding in-person meetings. Gift and delivery scams: Requests for money to cover fake customs fees. How financial institutions can help Banks and financial institutions are on the frontlines of combating romance scams. By leveraging technology and adopting proactive measures, they can intercept fraud before it causes irreparable harm. 1. Customer education and awareness Conduct awareness campaigns to educate clients about common scam tactics. Provide tips on recognizing fake profiles and unsolicited requests. Share real-life stories, like Anne’s, to highlight the risks. 2. Advanced data capture solutions Implement systems that gather and analyze real-time customer data, such as IP addresses, browsing history, and device usage patterns. Use behavioral analytics to detect anomalies in customer actions, such as hesitation or rushed transactions, which may indicate stress or coercion. 3. AI and machine learning Utilize AI-driven tools to analyze vast datasets and identify suspicious patterns. Deploy daily adaptive models to keep up with emerging fraud trends. 4. Real-time fraud interception Establish rules and alerts to flag unusual transactions. Intervene with personalized messages before transfers occur, asking “Do you know and trust this person?” Block transactions if fraud is suspected, ensuring customers’ funds are secure. Collaborating for greater impact Financial institutions cannot combat romance scams alone. Partnerships with social media platforms, AI companies, and law enforcement are essential. Social media companies must shut down fake profiles proactively, while regulatory frameworks should enable banks to share information about at-risk customers. Conclusion Romance scams exploit the most vulnerable aspects of human nature: the desire for love and connection. Stories like Anne’s underscore the emotional and financial toll these scams take on victims. However, with robust technological solutions and proactive measures, financial institutions can play a pivotal role in protecting their customers. By staying ahead of fraud trends and educating clients, banks can ensure that the pursuit of love remains a source of joy, not heartbreak. Learn more

As we step into 2025, the convergence of credit and fraud risk has become more pronounced than ever. With fraudsters leveraging emerging technologies and adapting rapidly to new defenses, risk managers need to adopt forward-thinking strategies to protect their organizations and customers. Here are the top fraud trends and actionable resolutions to help you stay ahead of the curve this year. 1. Combat synthetic identity fraud with advanced AI models The trend: Synthetic identity fraud is surging, fueled by data breaches and advanced AI tooling. Fraudsters are combining genuine credentials with fabricated details, creating identities that evade traditional detection methods. Resolution: Invest in sophisticated identity validation tools that leverage advanced AI models. These tools can differentiate between legitimate and fraudulent identities, ensuring faster and more accurate creditworthiness assessments. Focus on integrating these solutions seamlessly into your customer onboarding process to enhance both security and user experience. 2. Strengthen authentication against deepfakes The trend: Deepfake technology is putting immense pressure on existing authentication systems, particularly in high-value transactions and account takeovers. Resolution: Adopt a multilayered authentication strategy that combines voice and facial biometrics with ongoing transaction monitoring. Dynamic authentication methods that evolve based on user behavior and fraud patterns can effectively counter these advanced threats. Invest in solutions that ensure digital interactions remain secure without compromising convenience. 3. Enhance detection of payment scams and APP fraud The trend: Authorized Push Payment (APP) fraud and scams are increasingly difficult to detect because they exploit legitimate customer behaviors. Resolution: Collaborate with industry peers and explore centralized consortia to share insights and develop robust detection strategies. Focus on monitoring both inbound and outbound transactions to identify anomalies, particularly payments to mule accounts. 4. Optimize Your Fraud Stack for Efficiency and Effectiveness The trend: Outdated device and network solutions are no match for GenAI-enhanced fraud tactics. Resolution: Deploy a layered fraud stack with persistent device ID technology, behavioral analytics, and GenAI-driven anomaly detection. Begin with frictionless first-tier tools to filter out low-hanging fraud vectors, reserving more advanced and costly tools for sophisticated threats. Regularly review and refine your stack to ensure it adapts to evolving fraud patterns. 5. Build collaborative relationships with fraud solution vendors The trend: Vendors offer unparalleled industry insights and long-tail data to help organizations prepare for emerging fraud trends. Resolution: Engage in reciprocal knowledge-sharing with your vendors. Leverage advisory boards and industry insights to stay informed about the latest attack vectors. Choose vendors who provide transparency and are invested in your fraud mitigation goals, turning product relationships into strategic partnerships. Turning resolutions into reality Fraudsters are becoming more ingenious, leveraging GenAI and other technologies to exploit vulnerabilities. To stay ahead of fraud in 2025, let us make fraud prevention not just a resolution but a commitment to safeguarding trust and security in a rapidly evolving landscape. Learn more

A tale of synthetic ID fraud Synthetic ID fraud is an increasing issue and affects everyone, including high-profile individuals. A notable case from Ohio involved Warren Hayes, who managed to get an official ID card in the name of “Santa Claus” from the Ohio Bureau of Motor Vehicles. He also registered a vehicle, opened a bank account, and secured an AAA membership under this name, listing his address as 1 Noel Drive, North Pole, USA. This elaborate ruse unraveled after Hayes, disguised as Santa, got into a minor car accident. When the police requested identification, Hayes presented his Santa Claus ID. He was subsequently charged under an Ohio law prohibiting the use of fictitious names. However, the court—presided over by Judge Thomas Gysegem—dismissed the charge, arguing that because Hayes had used the ID for over 20 years, "Santa Claus" was effectively a "real person" in the eyes of the law. The judge’s ruling raised eyebrows and left one glaring question unanswered: how could official documents in such a blatantly fictitious name go undetected for two decades? From Santa Claus to synthetic IDs: the modern-day threat The Hayes case might sound like a holiday comedy, but it highlights a significant issue that organizations face today: synthetic identity fraud. Unlike traditional identity theft, synthetic ID fraud does not rely on stealing an existing identity. Instead, fraudsters combine real and fictitious details to create a new “person.” Think of it as an elaborate game of make-believe, where the stakes are millions of dollars. These synthetic identities can remain under the radar for years, building credit profiles, obtaining loans, and committing large-scale fraud before detection. Just as Hayes tricked the Bureau of Motor Vehicles, fraudsters exploit weak verification processes to pass as legitimate individuals. According to KPMG, synthetic identity fraud bears a staggering $6 billion cost to banks.To perpetrate the crime, malicious actors leverage a combination of real and fake information to fabricate a synthetic identity, also known as a “Frankenstein ID.” The financial industry classifies various types of synthetic identity fraud. Manipulated Synthetics – A real person’s data is modified to create variations of that identity. Frankenstein Synthetics – The data represents a combination of multiple real people. Manufactured Synthetics – The identity is completely synthetic. How organizations can combat synthetic ID fraud A multifaceted approach to detecting synthetic identities that integrates advanced technologies can form the foundation of a sound fraud prevention strategy: Advanced identity verification tools: Use AI-powered tools that cross-check identity attributes across multiple data points to flag inconsistencies. Behavioral analytics: Monitor user behaviors to detect anomalies that may indicate synthetic identities. For instance, a newly created account applying for a large loan with perfect credit is a red flag. Digital identity verification: Implement digital onboarding processes that include online identity verification with real-time document verification. Users can upload government-issued IDs and take selfies to confirm their identity. Collaboration and data sharing: Organizations can share insights about suspected synthetic identities to prevent fraudsters from exploiting gaps between industries. Ongoing employee training: Ensure frontline staff can identify suspicious applications and escalate potential fraud cases. Regulatory support: Governments and regulators can help by standardizing ID issuance processes and requiring more stringent checks. Closing thoughts The tale of Santa Claus’ stolen identity may be entertaining, but it underscores the need for vigilance against synthetic ID fraud. As we move into an increasingly digital age, organizations must stay ahead of fraudsters by leveraging technology, training, and collaboration. Because while the idea of Spiderman or Catwoman walking into your branch may seem amusing, the financial and reputational cost of synthetic ID fraud is no laughing matter. Learn more

The risk of identity theft continues to grow yearly for consumers and businesses alike. Identity theft and fraud cases have nearly tripled over the past ten years, with cybercrime losses totaling more than $10 billion this year alone.[1] An effective way for organizations to combat these threats is to implement a policy of identity risk management. Identity risk management Identity risk management refers to the methods used by organizations to anticipate potential fraud threats, protect themselves and their consumers from those vulnerabilities, resolve any fraud incidents that may occur, and prevent future fraud events from happening again. Businesses can implement these methods through a variety of tools and technologies designed to detect fraud risks and mitigate them as quickly and efficiently as possible.  By recognizing the risks of identity theft, helping consumers who fall victim to fraud, and preventing identity theft in the future, financial institutions can take an effective approach to identity risk management and ensure that their business is protected and their consumers stay safe. Recognizing risks of identity theft Identifying high-risk situations Inform consumers about high-risk situations that could lead to identity theft. Emphasize the dangers of data breaches, cyber-attacks, phishing scams, and social engineering tactics. Advise them to be cautious with personal documents and to avoid using public Wi-Fi for sensitive transactions. By raising awareness, financial institutions can help consumers stay vigilant. Risk-based authentication solutions can also help minimize risk with adaptive authentication methods. With sophisticated risk assessment and a combination of front- and back-end authentication methods, organizations can optimize the consumer experience and their identity risk management simultaneously. Protecting vulnerable information Guide consumers on safeguarding their most vulnerable information. Explain the importance of protecting Social Security numbers, credit card and bank account details, PINs, passwords, and medical records. Offer tips on securing this information and the potential consequences of it falling into the wrong hands. Providing practical advice, such as using password managers, enabling multifactor authentication, and regularly updating passwords, can significantly enhance your consumers’ security. Additionally, offering secure storage solutions for sensitive documents can further protect their information. Helping consumers who fall victim to fraud Providing immediate support If a consumer falls victim to identity theft, financial institutions should be ready to provide immediate support. Establish a clear protocol for reporting fraud and ensure that consumer service representatives are trained to handle such situations. Assist consumers in contacting their banks and credit card companies to report fraud and prevent further unauthorized transactions. Having a dedicated fraud response team can streamline this process and provide consumers with the reassurance that their issue is being handled by experts. This team can also offer personalized advice and support, making the recovery process less daunting for the victim. Helping restore identity To support consumers in the process of restoring their identity, financial institutions can offer identity restoration services as part of their consumer support. These services can include helping consumers navigate the complexities of repairing their credit, disputing fraudulent charges, and securing their accounts against future threats. Preventing identity theft in the future Enhancing personal security measures Encourage consumers to strengthen their personal security measures. Promote the use of strong, unique passwords and two-factor authentication (2FA) for all accounts. Advise them to regularly update and patch their software and devices. Offer services like secure document shredding to prevent thieves from accessing sensitive information. Financial institutions can also strengthen their identity risk management efforts by implementing robust security measures within their own systems. Demonstrating a commitment to security can build trust and encourage consumers to adopt similar practices. Implementing monitoring and alerts Financial institutions can offer identity theft protection services that include regular monitoring of credit reports and account alerts for suspicious activities. Educate consumers on the importance of closely monitoring their financial statements and bills to detect any unauthorized transactions early. Providing tools such as mobile apps that offer real-time alerts for suspicious activities can empower consumers to take immediate action if something seems amiss. Additionally, offering complimentary credit monitoring services can add an extra layer of protection. Leveraging data Data and analytics are among the most powerful tools at a financial institution’s disposal. By leveraging advanced analytics, institutions can identify patterns and anomalies that may indicate fraudulent activity. Machine learning algorithms can analyze vast amounts of transaction data in real- time, flagging suspicious behavior before it escalates into fraud. This proactive approach not only helps in early detection but also minimizes the impact on the consumer. Moreover, data analytics can streamline and improve the consumer experience by reducing false positives and ensuring that legitimate transactions are not unnecessarily flagged. This balance between security and convenience is crucial in maintaining consumer trust and satisfaction. Financial institutions can use these insights to tailor their fraud prevention strategies, using digital identity management solutions to provide more value to consumers. Behavioral analytics Fraud detection technology, such as behavioral analytics, is continually evolving as hacking methods become increasingly sophisticated. Insights from behavioral analytics can help mitigate fraud in real time and prevent identity theft, account takeover, and bot attacks — empowering businesses to provide a seamless consumer experience. Experian’s recent acquisition of NeuroID, an industry leader in behavioral analytics, means we now offer even more modern and frictionless capabilities, enhancing our fraud risk suite by providing a new layer of insight into digital behavioral signals and analytics throughout the consumer lifecycle. This additional level of defense against fraud can empower businesses to ensure that their consumers are safe and secure online. Identity management solutions Consumers are more at risk of identity theft than ever before, and it’s the responsibility of financial institutions to provide protection and support to the people they do business with. Offering identity management solutions can help organizations feel safe and secure about their consumer and business data without adding friction or functioning outside of their risk tolerance. Experian’s identity management tools allow financial institutions to confirm the identities of businesses and consumers with minimal friction, balancing end-user experience with enhanced security. This allows organizations to easily manage authentication events with confidence. Next steps Financial institutions have a vital role in helping consumers manage their risk of identity theft. By recognizing vulnerabilities, providing support to victims, and implementing preventive measures, financial institutions can protect their consumers’ personal information and financial well-being. Proactive identity risk management not only benefits consumers but also builds trust and loyalty with your brand. Protect your business from identity fraud today. Discover how Experian’s cutting-edge identity risk management solutions can safeguard your consumers and streamline your operations. Learn more about our identity management solutions This article includes content created by an AI language model and is intended to provide general information. [1] IdentityTheft.org. 2024 Identity Theft Facts and Statistics.

U.S. federal prosecutors have indicted Michael Smith of North Carolina for allegedly orchestrating a $10 million fraud scheme involving AI-generated music. Smith is accused of creating fake bands and using AI tools to produce hundreds of tracks, which were streamed by fake listeners on platforms like Spotify, Apple Music, and Amazon Music. Despite the artificial engagement, the scheme generated real royalty payments, defrauding these streaming services. This case marks the first prosecution of its kind and highlights a growing financial risk: the potential for rapid, large-scale fraud in digital platforms when content and engagement can be easily fabricated. A new report from Imperva Inc. highlights the growing financial burden of unsecure APIs and bot attacks on businesses, costing up to $186 billion annually. Key findings highlight the heavy economic burden on large companies due to their complex and extensive API ecosystems, often unsecured. Last year, enterprises managed about 613 API endpoints on average, a number expected to grow, increasing associated risks. APIs exposure to bot attacks Bot attacks, similar to those seen in streaming fraud, are also plaguing financial institutions. The risks are significant, weakening both security and financial stability. 1. Fraudulent transactions and account takeover Automated fraudulent transactions: Bots can perform high volumes of small, fraudulent transactions across multiple accounts, causing financial loss and overwhelming fraud detection systems. Account takeover: Bots can attempt credential stuffing, using compromised login data to access user accounts. Once inside, attackers could steal funds or sensitive information, leading to significant financial and reputational damage. 2. Synthetic identity fraud Creating fake accounts: Bots can be used to generate large numbers of synthetic identities, which are then used to open fake accounts for money laundering, credit fraud, or other illicit activities. Loan or credit card fraud: Using fake identities, bots can apply for loans or credit cards, withdrawing funds without intent to repay, resulting in significant losses for financial institutions. 3. Exploiting API vulnerabilities API abuse: Just as bots exploit API endpoints in streaming services, they can also target vulnerable APIs in financial platforms to extract sensitive data or initiate unauthorized transactions, leading to significant data breaches. Data exfiltration: Bots can use APIs to extract financial data, customer details, and transaction records, potentially leading to identity theft or data sold on the dark web. Bot attacks targeting financial institutions can result in extensive fraud, data breaches, regulatory fines, and loss of customer trust, causing significant financial and operational consequences. Safeguarding financial integrity To safeguard your business from these attacks, particularly via unsupervised APIs, a multi-layered defense strategy is essential. Here’s how you can protect your business and ensure its financial integrity: 1. Monitor and analyze data patterns Real-time analytics: Implement sophisticated monitoring systems to track user behavior continuously. By analyzing user patterns, you can detect irregular spikes in activity that may indicate bot-driven attacks. These anomalies should trigger alerts for immediate investigation. AI, machine learning, and geo-analysis: Leverage AI and machine learning models to spot unusual behaviors that can signal fraudulent activity. Geo-analysis tools help identify traffic originating from regions known for bot farms, allowing you to take preventive action before damage occurs. 2. Strengthen API access controls Limit access with token-based authentication: Implement token-based authentication to limit API access to verified applications and users. This reduces the chances of unauthorized or bot-driven API abuse. Control third-party integrations: Restrict API access to only trusted and vetted third-party services. Ensure that each external service is thoroughly reviewed to prevent malicious actors from exploiting your platform. 3. Implement robust account creation procedures PII identity verification solutions: Protect personal or sensitive data through authenticating someone`s identity and helping to prevent fraud and identity theft. Email and phone verification: Requiring email or phone verification during account creation can minimize the risk of mass fake account generation, a common tactic used by bots for fraudulent activities. Combating Bots as a Service: Focusing on intent-based deep behavioral analysis (IDBA), even the most sophisticated bots can be spotted, without adding friction. 4. Establish strong anti-fraud alliances Collaborate with industry networks: Join industry alliances or working groups that focus on API security and fraud prevention. Staying informed about emerging threats and sharing best practices with peers will allow you to anticipate new attack strategies. 5. Continuous customer and account monitoring Behavior analysis for repeat offenders: Monitor for repeat fraudulent behavior from the same accounts or users. If certain users or transactions display consistent signs of manipulation, flag them for detailed investigation and potential restrictions. User feedback loops: Encourage users to report any suspicious activity. This crowd-sourced intelligence can be invaluable in identifying bot activity quickly and reducing the scope of damage. 6. Maintain transparency and accountability Audit and report regularly: Offer regular, transparent reports on API usage and your anti-fraud measures. This builds trust with stakeholders and customers, as they see your proactive steps toward securing the platform. Real-time dashboards: Provide users with real-time visibility into their data streams or account activities. Unexplained spikes or dips can be flagged and investigated immediately, providing greater transparency and control. Conclusion Safeguarding your business from bot attacks and API abuse requires a comprehensive, multi-layered approach. By investing in advanced monitoring tools, enforcing strict API access controls, and fostering collaboration with anti-fraud networks, your organization can mitigate the risks posed by bots while maintaining credibility and trust. The right strategy will not only protect your business but also preserve the integrity of your platform. Learn more

In today’s digital age, call center fraud is a growing threat that businesses can no longer afford to ignore. As fraudsters become increasingly sophisticated, it’s crucial for companies to implement robust security measures to protect both their operations and their consumers. Various forms of call center fraud can have a significant impact on businesses. To prevent this, companies can use effective strategies including multifactor authentication solutions and account takeover prevention techniques. But first, what is call center fraud? Understanding call center fraud Call center fraud occurs when fraudsters exploit vulnerabilities in customer service operations to gain unauthorized access to sensitive information and commit identity theft. This type of fraud can take many forms, including social engineering, which occurs when a fraudster manipulates a call center agent into providing information or access, and phishing, which occurs when fraudsters use deceptive tactics to obtain confidential details from unsuspecting individuals. One of the most concerning tactics used by fraudsters is impersonation, or pretending to be legitimate consumers to gain access to accounts. Once they have access, they can make unauthorized transactions, change account details, or even take over the account entirely—a scenario known as an account takeover. The impact of these fraudulent activities can be devastating, leading to significant financial losses, damage to brand reputation, and a loss of consumer trust. Key strategies for preventing call center fraud According to recent research, account takeover fraud has increased by 330% in the past two years, projecting to cost $6.24 billion globally.[1] In addition, the number of U.S. consumers who have experienced account takeover has increased from 22% in 2021 to 29% in 2023.[2] To effectively combat call center fraud, businesses must adopt a multi-layered approach that includes advanced technological solutions, comprehensive employee training, and real-time monitoring. Here are some of the most effective strategies: 1. Implementing multifactor authentication (MFA) solutions One of the most effective ways to secure consumer interactions is by implementing multifactor authentication (MFA) solutions. MFA requires users to provide two or more verification factors to gain access to an account or complete a transaction. This adds an extra layer of security, making it significantly more difficult for fraudsters to succeed even if they have obtained some of the consumer’s information. MFA can be integrated into call center operations in several ways. For example, businesses can use voice recognition as a biometric factor, requiring consumers to verify their identity through a unique voiceprint. Other methods include sending a one-time code via text message, which the consumer must provide during the call, or using mobile app verification, where consumers approve transactions directly through their smartphones. 2. Account takeover prevention Account takeover is one of the most serious threats to call centers, as they involve fraudsters gaining control of a consumer’s account, often with disastrous consequences. To prevent account takeover, businesses can employ a combination of technological solutions and best practices. First, understanding what account takeover entails is crucial. It typically begins when a fraudster obtains some of the consumer’s personal information—often through phishing, social engineering, or a data breach. They then use this information to impersonate the consumer and convince call center agents to provide them with access to the account. To combat this, businesses can employ several account takeover prevention techniques. Anomaly detection systems can flag unusual activities, such as login attempts from unfamiliar locations or devices, prompting additional verification steps. Behavioral biometrics is another powerful tool, analyzing patterns in how users interact with their devices to detect inconsistencies that may indicate fraud. Continuous authentication, where the system continuously verifies the user’s identity throughout the session, is also effective in catching fraudsters in the act. 3. Training and awareness Technology alone may not be enough to entirely prevent call center fraud—human factors are equally important. Regular training for call center staff is essential to ensure team members can recognize and respond to potential fraud attempts. Employees should be trained to identify common tactics used by fraudsters, such as social engineering, and to follow strict verification procedures before providing any sensitive information. Awareness campaigns can also play a significant role in preventing fraud. Internally, companies should run regular campaigns to remind employees of the importance of adhering to security protocols. Externally, educating consumers about the risks of fraud and encouraging them to use security features like MFA can help reduce the likelihood of successful attacks. 4. Real-time monitoring and analytics Real-time monitoring is a critical component of an effective fraud prevention strategy. By continuously monitoring calls and transactions, businesses can quickly identify and respond to suspicious activities before they escalate. Advanced analytics tools, including voice analytics and behavior analysis, can provide valuable insights into potential fraud, allowing companies to take proactive measures. Voice analytics, for instance, can detect stress or hesitation in a caller’s voice, which may indicate that they are not who they claim to be. Behavior analysis can track how consumers typically interact with their accounts, flagging deviations from the norm as potential fraud. Continuous improvement is key here—regularly reviewing and updating monitoring protocols ensures that businesses stay ahead of evolving threats. Preventing call center fraud in your business By using a multi-layered fraud approach through a variety of authentication solutions, your business can quickly detect call center fraud without disrupting your consumers’ experience. Identify the risk Identity-based risk detection can pinpoint when a specific identity may be in the hands of fraudsters. Device intelligence solutions can recognize the risk associated with a specific device used to attempt online access. Address the risk Knowledge-based authentication (KBA) can quickly authenticate users by asking questions only they can answer, which can deter fraudsters. MFA services can generate and deliver a one-time password to a consumer’s mobile device to verify their identity in real time. Document verification allows your business to collect and verify images of identity documents uploaded from a consumer’s mobile device. Protect your business and your consumers from call center fraud Call center fraud is a significant threat that requires a proactive and comprehensive approach to prevention. By implementing strategies such as multifactor authentication solutions, account takeover prevention techniques, and robust employee training, businesses can significantly reduce their risk of falling victim to fraud. In today’s fast-paced digital world, staying vigilant and proactive is the key to safeguarding your call center against fraud. Act now to protect your business and maintain the trust of your consumers. Enable your call center to detect risk quickly and effectively with our robust fraud prevention solutions. Get started Download our identity and fraud report This article includes content created by an AI language model and is intended to provide general information. [1] Worldmetrics.org, Account Takeover Statistics: Losses to Reach $6.24 Billion Globally, 2024. [2] Security.org, Account Takeover Incidents are Rising: How to Protect Yourself in 2024.

Financial institutions are constantly searching for ways to engage their consumers while providing valuable services that keep them financially sound and satisfied. At the same time, consumers are looking for ways to limit their risk and grow their financial power while improving and protecting their financial health. Both can be accomplished through personalized financial experiences.

For auto dealerships, the roar of engines and the clink of deals used to be the only sounds associated with financial risk. But in today's world, a silent threat lurks in every showroom: identity fraud. This insidious crime is costing dealerships millions, leaving a trail of financial and reputational wreckage in its wake. The Numbers Don't Lie: Reports of the impact of identity fraud on auto dealerships are becoming more common as the industry leans more heavily on digital retailing. According to the Federal Trade Commission, nearly 80,000 cars were stolen in 2023 via fraud. Who's Behind the Wheel? The perpetrators of fraud come in all shapes and sizes. While classic ID theft with stolen documents still exists, the real menace lies in synthetic identities: Frankenstein accounts cobbled together from stolen data and fake documents. These sophisticated creations can fool even the most vigilant dealership, resulting in high-value car loans taken out on non-existent people. The Ripple Effect: The consequences of identity fraud extend far beyond lost cars. Dealerships face: Financial losses: Wrecked credit and repossessions add up quickly. Operational headaches: Investigations and legal proceedings are time-consuming and costly. Reputational damage: News of fraud breaches trust and scares away potential customers. So, What Can Dealerships Do? Arming themselves with the right tools and practices is crucial. Here are some key steps: Invest in identity verification technology: Advanced document scanning, and facial recognition can crack down on fake licenses. Experian's Fraud ProtectTM leverages cutting-edge technology to compare licenses to selfies to confirm consumers are who they say they are AND their license is valid. Train staff on fraud detection: Fraud Protect takes the challenge out of identifying fraud in a very simple way. There is no hardware or extensive training. It is as simple as sharing a URL and reading the results in your CRM. Implement stringent verification procedures: Fraud Protect allows dealers to implement fraud identification measures in a frictionless manner. As simple as one-time passcodes, selfies, and taking pictures, the consumer experience is very smooth.  For automotive dealers, the results are returned to their CRM within a few moments including all the information they need for proper decisioning. Fighting Back, One Mile at a Time: Identity fraud is a growing problem, but auto dealerships are not powerless. By raising awareness, investing in security, and embracing vigilance, dealers can protect themselves and drive this silent threat off the road. With Fraud Protect, dealers can verify documents and identity in a frictionless manner that does not interrupt the sales process. Learn more about auto fraud prevention solutions available or contact us to get started.   *This article includes content created by an AI language model and is intended to provide general information.

Online activity is a routine part of people’s days. Americans spend an average of 4 hours and 25 minutes on their phones every day,[1] and many regularly use multiple devices to access the internet. However, with more time spent in the digital space, the risk of identity theft and fraud also continues to grow. The growing threat of identity fraud This year, the FTC has already received 5.7 million total fraud and identity theft reports, 1.4 million of which were identity theft cases.[2] More consumers are becoming vulnerable to the threat of identity fraud, but many are unsure of how to protect themselves. To avoid monetary loss and significant lifestyle disruption, consumers are looking to their financial institutions to provide resources to help them prevent identity theft and protect their personal information online. Consumers want identity protection from their financial institutions Consumers also expect their banks to carry the responsibility of protecting their private data from the risk of theft. While most of them trust in the security provided by their banks, about 50% of consumers want their banks to offer additional protective measures.[3] This creates an opportunity for financial institutions to fulfill the role of “data protector” for the customers that depend on them. The convenience of a full suite of financial services all in one place is also important to consumers, as 45% would prefer to get all their banking products from the same financial institution.[4] While consumers need identity protection, businesses need new ways to engage their customers and drive more revenue. Fortunately, offering identity protection is an effective way to maintain a sticky relationship with your customers while delivering an enhanced, engaging experience. Protect your customers from fraud with Identity Protection Services With identity protection, your customers can: Check for exposed personal information and lower their risk of identity theft Reduce their exposure and decide who can track their activity and access their personal information online Keep control of their digital identity by reclaiming exposed personal information, increasing their privacy, and avoiding future risk An identity protection solution provides a comprehensive strategy to avoid the risk of identity theft, while delivering exceptional results that your customers need to feel safe and secure. Providing frequent updates and recommendations about their digital identity and credit score allows you to maintain an engaging communication channel with your customers and boost your brand interaction. For example, the average Experian® user had a 60% alert open rate and 12% post-alert login rate.[5] As they continue to receive useful suggestions for strengthening their online security, your customers may interact with your app or website more regularly and consistently. This can create valuable opportunities for you to encourage them to open new accounts, start new credit lines, or borrow more money. In addition, giving your customers an added layer of assurance can drive them to remain loyal, long-standing customers to your business. 96% of active Experian subscribers with a free bundle were still subscribed after 12 months[6] 90% of active Experian subscribers with a paid bundle were still subscribed after 12 months[6] Less than 1% churn rate with fewer than 100 service calls[7] Consumers want protection from thieves who might steal their personal information, and they expect it from a trusted source. By offering an identity protection solution, you can foster stronger relationships with your customers while reducing their vulnerability to fraud. Visit our website to see how Identity Protection Services can help you deliver best-in-class protection for your customers. [1] PC Magazine. Americans Check Their Phones an Alarming Number of Times Per Day. May 2023. [2] IdentityTheft.org. 2023 Identity Theft Facts and Statistics. [3] PYMTS. Half of Consumers Want More Security Measures From Banks, January 2023. [4] PYMTS. 45% of US Consumers Want Banking Bundles. August 2022. [5] Experian Data, average user experience with Digital Identity Manager, May 2023. [6] Experian data, August 2023. [7] Experian Data, average user experience with Digital Identity Manager, May 2023.

This article was updated on November 9, 2023. Fraud – it’s a word that comes up in conversations across every industry. While there’s a general awareness that fraud is on the rise and is constantly evolving, for many the full impact of fraud is misunderstood and underestimated. At the heart of this challenge is the tendency to lump different types of fraud together into one big problem, and then look for a single solution that addresses it. It’s as if we’re trying to figure out how to un-bake a terrible cake instead of thinking about the ingredients and the process needed to put them together in the first place. This is the first of a series of articles in which we’ll look at some of the key ingredients that create different types of fraud, including first party, third party, synthetic identity, and account takeover. We’ll talk about why they’re unique and why we need to approach each one differently. At the end of the series, we’ll get a result that’s easier to digest. I had second thoughts about the cake metaphor, but in truth it really works. Creating a good fraud risk management process is a lot like baking. We need to know the ingredients and some tried-and-true methods to get the best result. With that foundation in place, we can look for ways to improve the outcome every time. Let’s start with a look at the best known type of fraud, third party. What is third-party fraud? Third-party fraud – generally known as identity theft – occurs when a malicious actor uses another person’s identifying information to open new accounts without the knowledge of the individual whose information is being used. When you consider first-party vs third-party fraud, or synthetic identity fraud, third-party stands out because it involves an identifiable victim that’s willing to collaborate in the investigation and resolution, for the simple reason that they don’t want to be responsible for the obligation made under their name. Third-party fraud is often the only type of activity that’s classified as fraud by financial institutions. The presence of an identifiable victim creates a high level of certainty that fraud has indeed occurred. That certainty enables financial institutions to properly categorize the losses. Since there is a victim associated with it, third party fraud tends to have a shorter lifespan than other types. When victims become aware of what’s happening, they generally take steps to protect themselves and intervene where they know their identity has been potentially misused. As a result, the timeline for third-party fraud is shorter, with fraudsters acting quickly to maximize the funds they’re able to amass before busting out. How does third-party fraud impact me? As the digital transformation continues, more and more personally identifiable information (PII) is available on the dark web due to data breaches and phishing scams. Given that consumer spending is expected to increase1, we anticipate that the amount of PII readily available to criminals will only continue to grow. All of this will lead to identity theft and increase the risk of third-party fraud. More than $43 billion in total losses was reported due to identity theft and fraud in the U.S. in 2022.2 Solving the third-party fraud problem We’ve examined one part of the fraud problem, and it is a complex one. With Experian as your partner, solving for it isn’t. Continuing my cake metaphor, by following the right steps and including the right ingredients, businesses can detect and prevent fraud. Third-party fraud detection and prevention involves two distinct steps. Analytics: Driven by extensive data that captures the ways in which people present their identity—plus artificial intelligence and machine learning—good analytics can detect inconsistencies, and patterns of usage that are out of character for the person, or similar to past instances of known fraud. Verification: The advantage of dealing with third-party fraud is the availability of a victim that will confirm when fraud is happening. The verification step refers to the process of making contact with the identity owner to obtain that confirmation and may involve identity resolution. It does require some thought and discipline to make sure that the contact information used leads to the identity owner—and not to the fraudster. In a series of articles, we’ll be exploring first-party fraud, synthetic identity fraud, and account takeover fraud and how a layered fraud management solution can help keep your business and customers safe and manage third-party fraud detection, first-party fraud, synthetic identity fraud, and account takeover fraud prevention. Let us know if you’d like to learn more about how Experian is using our identity expertise, data, and analytics to create robust fraud prevention solutions. Contact us 1 Experian Ascend Sandbox 2 2023 U.S. Identity and Fraud Report, Experian.

In a noisy digital world, capturing the attention of online users can seem impossible. While a 2015 study claimed that the average consumer’s attention span had shrunk to just 8 seconds, a more recent global study by Yahoo and OMD Worldwide shows that Gen Z consumers lose active attention for ads after just 1.3 seconds—less time than any other age group.[1] Financial institutions are always looking for ways to attract more online users and earn new business by delivering the value consumers want and need. If you want to grow your customer base, add identity protection to the financial services you already offer. Providing complementary identity protection solutions alongside your existing service offerings can make your business more marketable and attract more new customers. This is a great way to earn more market share while delivering value that consumers want. What do consumers want? Consumers want control over their data and personal information from a company they trust. Research shows they are more likely to partner with a brand they’re already loyal to, such as their bank. 57% of consumers would like their primary financial institution to provide or offer an identity protection service.[2] In addition, consumers have indicated interest in having all their financial data accessible in one place.[3] In this same vein, an all-in-one identity protection solution that reduces risk and gives consumers more control over how their data is used online is a convenient, in-demand solution that can help decrease vulnerability and limit online exposure. Consumers want these high-value, high-demand tools, and data shows that they are willing to pay for it. 89% of consumers want more control over how their data is collected and used online, and 82% are willing to invest time and money to better protect their privacy.[4] While proactive services for identity protection are important, not all fraud incidents can be avoided. In addition to providing anticipatory protection solutions, consumers need a response plan in place if they experience an identity theft or fraud event. Proactive protection and reactive restoration Unfortunately, victims of identity theft spend an average of 6.3 hours resolving identity fraud.[5] With identity protection and restoration services in place, you can assure potential new customers that if the worst should happen, you can help them reclaim their exposed information and restore their identity. For example, consumers can save up to 177 hours of time by using Experian’s Digital Identity Manager, a tool that helps protect consumer data and reduce vulnerability to theft.[6] Resources like these, coming from a trusted source, can put consumers’ minds at ease and make it easy for them to decide to do business with you. Identity protection from a trusted source Consumers are seeking protection from identity thieves, and they expect it from a trusted source. Offering Experian’s Identity Protection Services can help you stand out by providing valuable financial security to new customers, encouraging more new names to do business with your company. Identity Protection Solutions from Experian are best-in-class, and we have the results to prove it: 96% of active Experian subscribers with a free bundle were still subscribed after 12 months (Experian data, August 2023)  90% of active Experian subscribers with a paid bundle were still subscribed after 12 months (Experian data, August 2023)  Less than 1% churn rate with fewer than 100 service calls Visit our website to learn more [1] Insider Intelligence, Gen Z has a 1-second attention span. That can work to marketers’ advantage. 2022. [2] Javelin Strategy and Research, 2022. [3] MX, What Consumers Really Want from their Financial Providers: A 2023 Roadmap. [4] Cisco 2022 Consumer Privacy Survey, 2022. [5] Javelin, 2023 Identity Fraud Study. [6] Experian Data, average user experience with Digital Identity Manager, May 2023. This article is provided for general guidance and information.  It is not intended as, nor should it be construed to be, legal, financial or other professional advice.  Please consult with your attorney or financial advisor to discuss any legal issues or financial issues involved with credit decisions.

Money mule fraud is a type of financial scam in which criminals exploit individuals, known as money mules, to transfer stolen money or the proceeds of illegal activities. Money mule accounts are becoming increasingly difficult to distinguish from legitimate customers, especially as criminals find new ways to develop hard-to-detect synthetic identities. How money mule fraud typically works: Recruitment: Fraudsters seek out potential money mules through various means, such as online job ads, social media, or email/messaging apps. They will often pose as legitimate employers offering job opportunities promising compensation or claiming to represent charitable organizations. Deception: Once a potential money mule is identified, the fraudsters use persuasive tactics to gain their trust. They may provide seemingly legitimate explanations like claiming the money is for investment purposes, charity donations or for facilitating business transactions. Money Transfer: The mule is instructed to receive funds to their bank or other financial account. The funds are typically transferred from other compromised bank accounts obtained through phishing or hacking. The mule is then instructed to transfer the money to another account, sometimes located overseas. Layering: To mask the origin of funds and make them difficult to trace, fraudsters will employ layering techniques. They may ask the mule to split funds into smaller amounts, make multiple transfers to different accounts, or use various financial platforms such as money services or crypto. Compensation: The money mule is often promised a percentage of transferred funds as payment.  However, the promised monies are lower than the dollars transferred, or sometimes the mule receives no payment at all. Legal consequences: Regardless whether mules know they are supporting a criminal enterprise or are unaware, they can face criminal charges. In addition, their personal information could be compromised leading to identity theft and financial loss. How can banks get ahead of the money mule curve: Know your beneficiaries Monitor inbound paymentsEngage identity verification solutionsCreate a “Mule Persona” behavior profileBeware that fraudsters will coach the mule, therefore confirmation of payee is no longer a detection solution Educate your customers to be wary of job offers that seem too good to be true and remain vigilant of requests to receive and transfer money, particularly from unknown individuals and organizations. How financial institutions can mitigate money mule fraud risk When new accounts are opened, a financial institution usually doesn’t have enough information to establish patterns of behavior with newly registered users and devices the way they can with existing users. However, an anti-fraud system should catch a known behavior profile that has been previously identified as malicious. In this situation, the best practice is to compare the new account holder’s behavior against a representative pool of customers, which will analyze things like: Spending behavior compared to the averagePayee profileSequence of actionsNavigation data related to machine-like or bot behaviorAbnormal or risky locationsThe account owner's relations to other users The risk engine needs to be able to collect and score data across all digital channels to allow the financial institution to detect all possible relationships to users, IP addresses and devices that have proven fraud behavior. This includes information about the user, account, location, device, session and payee, among others. If the system notices any unusual changes in the account holder’s personal information, the decision engine will flag it for review. It can then be actively monitored and investigated, if necessary. The benefits of machine learning This is a type of artificial intelligence (AI) that can analyze vast amounts of disparate data across digital channels in real time. Anti-fraud systems based on AI analytics and predictive analytics models have the ability to aggregate and analyze data on multiple levels. This allows a financial institution to instantly detect all possible relationships across users, devices, transactions and channels to more accurately identify fraudulent activity. When suspicious behavior is flagged via a high risk score, the risk engine can then drive a dynamic workflow change to step up security or drive a manual review process. It can then be actively monitored by the fraud prevention team and escalated for investigation. How Experian can help Experian’s fraud prevention solutions incorporate technology, identity-authentication tools and the combination of machine learning analytics with Experian’s proprietary and partner data to return optimal decisions to protect your customers and your business. To learn more about how Experian can help you leverage fraud prevention solutions, visit us online or request a call

Millions of people access the internet every day using desktop computers, laptops, and mobile devices. Though an increased number of online users have been accessing the web while working from home due to the pandemic, many are still going online in public places and using public wi-fi and/or unsecured networks, such as coffee shops, airports, and internet cafes. While it may be convenient to access the internet from anywhere at any time, there are risks involved with doing so. Connecting to the internet on an unsecured network without the proper protection can render your device vulnerable to data collection, tracking, and targeting from hackers. The best way to protect yourself from these kinds of attacks is to use a Virtual Private Network, or VPN. What is a Virtual Private Network? A Virtual Private Network (VPN) creates an encrypted, private connection to the internet that allows you to securely browse the web while protecting your information from being tracked or targeted. Globally, there are approximately 1.5 billion VPN users as of 2023, making up about a third of all internet users worldwide. 43% of these people use a VPN for security reasons.[1] How does a VPN work? A VPN routes your internet traffic through a different server, rather than the server your internet service provider usually uses. The data you send and receive is then encrypted, so even if it were to fall into the wrong hands, it would be unreadable. Your data will appear to be sent from the VPN itself, instead of from your device. This provides an additional layer of privacy to your browsing experience, especially if you’re using a public or unsecured network to access the internet. How can you use a VPN? With Experian’s Secure VPN, what you search, see, and share on your mobile or desktop devices stays hidden from hackers, preventing data collection, tracking, and targeting. You can confidently connect to a stronger, more reliable, private Wi-Fi connection that secures your devices’ online or offline activity. What are the benefits of Experian’s Secure VPN? You can use Experian’s Secure VPN on an unlimited number of desktop and mobile devices, so your whole family can be protected. Secure VPN’s high-speed connection ensures that you won’t need to worry about slow loading times or dropped connections, and its unrivaled security allows you to take advantage of best-in-class privacy. Browsing the internet on an unsecured network is risky and can leave you open to data theft and identity fraud. By using a VPN, you’ll enjoy a safer, more secure internet experience. Visit our website to learn more about Experian’s Digital Privacy and Control solutions. [1]DataProt.net. VPN Statistics for 2023 – Keeping Your Browsing Habits Private.

The average person spends nearly seven hours a day online[1]. Much of that time consists of sharing personal information with a variety of websites, which can sometimes lead to bad actors gaining unauthorized access to your personal information for ill-intended purposes. Theft of your personal information – and subsequently, identity fraud – can have seriously damaging consequences. According to a report from the AARP, nearly 42 million Americans fell victim to identity fraud in 2021, costing $52 billion in losses[2]. You can proactively take three easy steps to protect and keep track of your personal information online. 1. Keep your information updated. Outdated information can lead to problems for your online accounts. If an old online account that you no longer use has outdated information such as a previous home address where you no longer live, or an email address you haven’t used recently, that information can sometimes be used to access your current online accounts. If a hacker has access to those details, they could potentially use that information for criminal activity such as making unauthorized transfers from your bank account. Solution: Make sure your information – name, email address, phone number, mailing address, etc. – is up to date across any websites you use frequently. This may include online shopping, financial information, medical records, email accounts, and/or social media networks. It’s also a good idea to delete any online accounts you no longer use and/or remove any out-of-date information from those accounts. 2. Switch up your passwords. Using the same password for too long, or for multiple accounts, can make it easy for hackers to obtain your personal information. Creating a secure password that’s also easy to remember can be a challenge. Many hackers will try to guess your password based on common information that’s easy to remember, such as birthdates, anniversaries, names of family members or pets, or street addresses. Solution: Change your password at least every six months for any websites where you’ve shared your personal information, and make sure this password can’t be easily guessed. Avoid special dates, names, or street addresses. Using a password manager can help you generate stronger passwords and keep track of existing ones across multiple online accounts, while safely storing and protecting your login information in one place. 3. Add two-factor authentication when possible. Without it, hackers can more easily break into your accounts and gain access to your personal information. Two-factor authentication adds a second layer of defense against people who try to gain access to your online accounts without your permission. Without it, a hacker only needs to obtain your email address and guess your password to get into your account and steal your personal information. Solution: Enable two-factor authentication for as many of your online accounts as possible. When this feature is turned on, a temporary code will be sent to your phone or email inbox whenever you attempt to log in to your account. Since hackers will not have access to this code, they will not be able to access your account.  Identity theft is a serious concern with potentially severe consequences. Avoid any unnecessary risk by:   Keeping your information up to date Changing your passwords often Adding two-factor authentication when possible By taking these proactive steps, you can drastically reduce your risk of falling victim to identity theft while maintaining control of your personal information online. Learn more about our identity protection services [1] Oberlo. 2022. How Much Time Does the Average Person Spend on the Internet? [2] AARP. 2022. Identity Fraud Hit 42 Million People in 2021.