Identity theft is the fastest growing crime in America, with reports of breaches hitting the news every day. Customers are becoming increasingly aware of the threat to themselves and their families. According to a recent Unisys Corporation survey, 50 percent of Americans said they would switch financial institutions for better protection. It is critical for financial institutions to have the right processes against fraud in place.
As a first step, an educated customer can be a key to deterring identity theft. Once people know how to detect attacks, they will become a first line of defense. In the past, most of the successes with taking down fraudsters in a timely manner have resulted from the outpouring of consumer reports.
Fraudsters are constantly innovating. What used to suffice as thorough new account authentication -two forms of identification and Check Systems- are no longer enough. As driver's licenses and utility records are easily forged, it is imperative that financial institutions must have systems in place to ward off fraudsters.
A proper new account authentication process is vital to a strong security foundation. The verification process should match a potential new customer's information with data in trusted third-party sources. Going beyond typical credit-only based databases, financial institutions should compare new customer data against public and private databases to include Postal Stops, utility company and Social Security records. Currently, third-party vendors are offering high-tech identity verification tools that scan the fore-mentioned databases and more to provide instant feedback.
Along with data verification, new account authentication also includes delving into a person's background to investigate the history of a given identity. This will uncover past and current fraud alerts associated with the individual and other facts that can aid a financial institution's decision to open a new consumer account. Once data verification and ID history are conducted, institutions can develop a risk assessment, high or low, based on a summation of the data analyzed.
If an assessment determines that an individual is high-risk, it may be necessary to ask "out-of-wallet" questions to verify deep background information. Answering these types of questions should be very tough unless you were the individual associated with an identity. Examples of such questions include: Where did you live in the mid-1990s? Where did you go to college? How many credit cards do you have?
In the past, when financial institutions have used this tactic to verify an identity after determining a high-risk prospect, the criminal will usually find a way to back out of the situation. In many cases, they claim to have left information in their cars and never return to finish opening the new account.
With various types of identity theft attacks on the rise, financial institutions need a strong security blanket across where customers can be vulnerable; this will ensure perpetrators of identity theft schemes aren't able to open or modify existing financial accounts with the information obtained from victims.
Secure Identity Systems is the only company in the U.S. that offers the end-to-end solution for Red Flag compliance including: Initial Risk Assessment, Policies and Procedures Manual, New Account Authentication, Change of Address Verification, Identity Theft Protection with fully managed recovery, On-site Staff Training, and an Anti-Phishing Program. For additional information, please call (615) 377-7661, or e-mail: bansley@secureidentitysystems.com.
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