This blog post has been coauthored with Karen Lewison
In recent posts we have been concerned with online credit card fraud and how to fight it using cardholder authentication. In this post we are concerned with another kind of financial fraud, known as application fraud or new account fraud. Both kinds of fraud have been rising after the introduction of chip cards, for reasons mentioned by Elizabeth Lasher in her article The Surge of Application Fraud:
“Due to the high volume of data breaches, Social Security numbers, mailing addresses, passwords, health history, even the name of our first pet is all for sale on the Dark Web. When you combine this phenomenon with the economic pressure applied on fraudsters to find a new cash cow after chip and signature plugged a gap in card-present fraud in the US, there is a perfect storm.”
The term “application fraud” refers to the creation of a financial account, such as a bank account or a mortgage account, with the intention to commit fraud. Application fraud can be first-party fraud, where the account is opened under the fraudster’s own identity, or third-party fraud, where the fraudster uses a stolen identity. Here we are primarily concerned with the latter.
Continue reading “A New Tool Against the Surge of Application Fraud”