New account fraud is a serious threat to personal data. New account fraud is often hard to detect and victims are usually unaware that it has occurred until too late. Financial identity theft is perpetrated by thieves using the credit standing of their victims. It is complex problem for both the victims of the crime and the enterprises and merchants that are involved. New account fraud can take place in any industry where accounts are opened or payments are made. Fraudulent accounts can be used to pay for common things such as utility bills. However, some new account fraud can involve criminals taking out loans in the names of their victims. Fraudsters routinely use new account fraud to take out loans for cars, boats and other luxury items. Criminals have also used new account fraud to take out payday loans in the name of another person or open new lines of credit. Victims often don’t realize what has happened until a car has been sold or a loan has become delinquent. Huge balances can be accrued on fraudulent accounts. Currently credit card fraud makes up almost half of all identity theft.
How Can Enterprises Fight Back Against New Account Fraud?
Enterprises need to evaluate new account fraud with two different approaches in mind. The first approach should include making sure that all systems are safeguarded against hacks that could allow data to be breached and exploited. The second approach is to ensure that any accounts that are opened by customers are legitimate. The second approach mainly applies to enterprises that provide financial services or sell goods and services. For comprehensive security, enterprises should employ platforms that protect data using analytics. Endpoint protection is needed to ensure that any activity that deviates from the norm is flagged and addressed in real time. Norms can be established using a big data platform that ingests, digests and acts on all pieces of data that are created. Guidelines can be set up that make it easy to flag suspicious activity based on location, volume and other predetermined factors.
New account fraud is a growing risk for businesses across all sectors. Using big data platforms to implement appropriate guidelines for fraud prevention can help protect users from breaches to their personal data.
How Vulnerable Data Makes New Account Fraud Easy
Close to 16 million Americans are the victims of identity fraud each year. New account fraud is so prevalent due to the ease with which criminals are able to obtain new accounts. Many enterprises leave personal data open to hackers. Data breaches give criminals the ability to acquire the personal information of millions of people each year. That information can then sold on the black market. The stolen information can be used to make purchases or obtain credit under the names of the victims. Any enterprise that holds data can be at risk of a breach. This type of fraud is not limited to the financial sector. Details like names, addresses, birth dates and Social Security numbers provide criminals with the information needed to open false accounts.
Kidal Delonix is a contributor to Mr. Hoffman's blog. The views and opinions are entirely his/her own and may not reflect Mr Hoffman's views.
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