By: Ken Pruett
The majority of the customers I meet with use some sort of Velocity Checks to assist with their Fraud and Compliance process. However, there are still quite a few that do not, especially when opening up New Business Accounts.
Historical data checks have proven to be an effective form of identity theft prevention for both Consumer fraud and Commercial Fraud. We see scenarios where a perpetrator will have one successful penetration of a business and opens up a fraudulent account. They then try and replicate this against the same business. All of the information may be different, with the exception of one element, often the phone number. Without velocity checks, this may not be identified at the time the account is being opened.
More sophisticated rings try to be more creative in their fraudulent attempts. They may gain access to a consumers information and then go and apply at a variety of entities. They are more careful, so they never attempt to target the same business twice. They are aware that many companies have velocity checks, so they do not want to take a chance of having their information questioned.
At a minimum, the use of in-house velocity checks should be a standard process for you fraud detection measures. Typical data elements to check against are; name (business or consumer), address, phone number, and Social Security Number.
A fraud best practice would be to use a tool that provides velocity checks and incorporates the information into a fraud prevention tool. There are tools that provide checks across multiple businesses and this typically provides the best level of protection. By looking at inquiry information across multiple businesses, you are able to help prevent being a victim of some of the more sophisticated rings.
Don’t find yourself being the easiest target. Once you get hit, it could snowball and you may be victimized multiple times. We all know there is no way to stop all of the fraud, but let’s not make it too easy on the perpetrators. Try and find a way to use some sort of velocity checks in your process to at least minimize your fraud risk.
