3 Ways to Reduce Fraudulent Account Openings

By Amador Testa July 01, 2016


With the rise of large-scale data breaches, fraudsters have access to more customer data than ever before.

Fraud Is Big Business

Fraudsters are well organized and looking for strategies to make money reliably. Emailage has reviewed how EMV is pushing fraudsters to stop duplicating cards and find other sources of income from fraud. This change has led some fraudsters to focus on creating fraudulent accounts.

When Solutions Fail

With a full customer identity being sold for as little as $30, fraudsters have easy access to trustworthy customer data. Effective fraud managers need solutions that can detect risky applications using real customer information.

Another challenge for fraud managers trying to stop fraudulent account openings is application velocity. When breached data is acquired, fraudsters may quickly apply for multiple credit cards and loans at different businesses across industries. When fraud managers work in a silo, fraudsters are able to keep leveraging stolen identities.

3 Ways to Stop More Fraudulent Account Openings

Choosing the right tools to prevent more fraudulent account openings can seem like guesswork. Here are my recommendations for the data points to keep in mind when choosing solutions:

  • Networked Data: A shared network is able to detect application velocity and can stop fraudsters who apply for multiple accounts in a short window of time.
  • IP and Geolocation: Location data can be cross-validated with application information to stop risky applications from being approved.
  • Dark Web Monitoring: Monitoring compromised data can be used for finding risky applicants. Once compromised data is used, checks can be put in place for the applicant to verify their identity.

With these three data points in hand, you will make it harder for fraudsters to create an account.

Figures included in this blog are taken from darkwebreview.com.

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About the Author

Amador Testa is the Emailage Chief Product Officer and has over 15 years of experience in risk management. Prior to joining Emailage, he served as the Director of Personal Savings & Card Acquisitions Fraud Risk Management for American Express and the Senior Vice President for Fraud Risk at Citigroup.