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Evaluating Fraud and PATRIOT Act Solutions
Question: How should our organization approach customer authentication?
Answer: No single tool can provide the highest confidence in verifying customer identities. The optimal approach is integrating several different types of anti-fraud tools into a comprehensive solution, customized for a company's risk exposure, type of account, sales channel and other factors.
The foundation for any fraud prevention program is customer authentication -- confirming that the person is who he or she claims to be. Because driver's licenses and other official government identification are so easy to falsify today, they are not sufficient verification unless the consumer is known to the institution and is conducting the transaction in person. This type of verification is referred to as documentary verification.
Nondocumentary verification, which can be used in addition to or instead of documentary verification, is essential to prevent fraud and is the basis for consumer authentication, especially in online or call center transactions. Nondocumentary verification includes:
- Positive verification: comparing information provided by the consumer with trusted third-party source, such as consumer reporting agency
- Logical verification: using commercially available analysis tools to determine the consistency of information from various sources
- Negative verification: checking information provided by the consumer against databases of known fraud, bad checks and government lists
Best Practices integrates some or all of these techniques, as appropriate to a company's products, sales channels and risk exposure.
Experian works with more than 40,000 clients across diverse industries, including financial services, telecommunications, health care, insurance, retail and catalog, automotive, manufacturing, leisure, utilities, property, e-commerce and government. You can learn more about this featured topic by visiting: http://www.experian.com/products/patriot_act_compliance.html
800-859-8990 Email address: Kevin.mcclafferty@us.scorex.com
First published on BankersOnline.com 8/4/03
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