Fraud & Identity Fraud & Identity


Fraud & Identity Featured Article

June 13, 2017

Account Takeover and Application Fraud On the Rise

Account takeover fraud and application fraud are two major challenges for U.S.-based financial institutions, according The Aite Group Impact Report “Financial Institution Fraud Trends: ATO and Application Fraud Rising Rapidly.”Obviously, these trends aren’t so great for consumers either.


Account takeovers alone resulted in $2.3 billion in losses in 2016, according to a March PYMENTS article. And application fraud costs the financial sector millions annually, and it can result in brand damage and negative publicity for the entities that enable fraudsters to create these new accounts, NuData Security says.

In the case of account takeover, bad actors use part of a person’s identity to gain access to that individual’s financial accounts.

“The perpetrator often reroutes communication about the account, keeping the victim in the dark so the thievery can continue longer,” explains an article on Creditcards.com. “Affected accounts can include credit cards, checking and savings accounts, brokerage accounts, and store loyalty rewards accounts.”

Account takeover fraud is especially attractive to fraudsters because it tends to have a bigger payoff, the piece suggests. That’s because it can take longer for individuals to realize this kind of fraud. Fraudsters make sure of that by rerouting communication about the account away from the person in whose name they opened the account.

Bad actors also sometimes use the information they leveraged to take over one account to access other accounts of an individual. People who use one password for multiple accounts make it easy for fraudsters to do that.

As for application fraud, that’s what happens when a person’s details are stolen and used to open new accounts. That can involve fraudsters using other people’s identities to open up bank accounts, get credit cards and/or loans, or even get tax rebates.

An article posted earlier this year on the Google AdWords Community notes that fraudsters and hackers use various means to gain personal information that can be used to infiltrate people’s existing financial accounts or to create entirely new ones.

That includes:

  • email phishing,
  • instant messaging,
  • Internet auctions,
  • mimicking official bank websites,  
  • phone calls (in which fraudsters may pretend to work for a bank),
  • rerouting to fake and bogus websites, and
  • sending malware to devices.

To guard against such problems, people should avoid sharing their account details, never use public computers to log into their bank accounts, and check their bank accounts regularly. Individuals should also avoid clicking on links in emails, use different passwords for different accounts, and use licensed antivirus software.




Edited by Alicia Young

Article comments powered by Disqus






Industry Insights

(MobileID) Proactive Fraud Prevention

Interconnect-related fraud such as International Revenue Share Fraud (IRSF) and PBX hacking fraud continue to be a billion dollar problem to the telecom industry.

(Defender Shield) Defense solutions for the modern SMS ecosystem

SMS is a ubiquitous communication method for person-to-person (P2P) text messaging, which has been in use globally for nearly 20 years.

(Defender Shield) Preventing Grey Routes and the Multi-billion dollar Threat

The convenience of mobile messaging has brought communication efficiency to billions of consumers worldwide. As is often the case with widely accepted technologies; however, convenience can provide a vulnerable gateway to fraudulent activity.

Product Documents

Asset Protect

While unlimited or high-volume voice and SMS plans offer great value to subscribers, sometimes fraudsters exploit these plans to avoid paying termination and interconnect fees.

Defender Shield

In a world with ever-increasing Application-to-Person (A2P) messaging needs and competition, improving customer satisfaction and eliminating revenue leakage is key for protecting SMS profits.

MobileID

Accurate and cost-efficient routing of voice calls and SMS is critical. Unfortunately, gathering reliable routing data on ported numbers and keeping up with constant changes in number plans is expensive and time-consuming.

Fraud Solutions

Communications fraud is a $20B annual global problem and growing. Companies are looking for peace of mind so that their business and their customers are protected from the onslaught of technology crime that is damaging their reputations and their balance sheets.