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The Great Debate: Credit or Public Records Data
Question: Should my bank use an identity verification solution based on credit data or public records data?
Answer: There are strong pros and cons for both credit and public records data so you need to understand the differences and perhaps even consider using a combination of both. Credit bureaus are very good at helping you determine the credit worthiness of a consumer and can provide some insight into an identity such as if there is a credit freeze, fraud alert, and occasionally an address discrepancy. Solutions based on public records data have a broader range of data sources which typically means they have higher locate rates especially among younger, recent immigrants and unbanked consumers. If you are issuing challenge questions, you will find that public records based solutions have less intrusive topics and can date back further than recent events such as monthly payments, making it harder for someone to answer using a stolen wallet or piece of postal mail.
While the type of data used is an important consideration factor, you also need to evaluate the functionality and overall ability an id verification solution has in validating an identity and alerting you to potential identity theft and fraud. Here are some questions to keep in mind:
- Does your demographic market include thin file consumers?
- Will your customers prefer to answer questions about their mortgage and credit card payments or about people they know, places they have lived and cars they have owned?
- Does the solution help meet all the compliance regulations for the USA Patriot Act and Red Flag regulations?
- Is it enough to receive pass/fail rates related to an identity verification or do you need more actionable intelligence to make an independent decision?
- How flexible is the solution? Does it offer an on-demand change management tool or will you need to involve your IT department or contact the vendor to make any changes?
Idology Boilerplate
IDology's identity and age verification solutions help banks detect and prevent fraud while driving revenue and decreasing costs. Using our ExpectID® product suite clients are able to verify an individual's identity in real-time without interrupting the transaction. Our solutions provide more than simple pass/fail rates so businesses can quickly detect and respond to suspicious activity.
IDology's verification process protects sensitive data and promotes consumer privacy. And we are the only provider to offer an on-demand change management tool so you can adapt your process as needed. For more information contact 866-520-1234 or visit http://www.idology.com/financial.html.
First published on BankersOnline.com 3/24/08
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