Identity theft is a criminal act of using someone else's personal data, usually with an intent to impersonate someone to obtain some gain. Since we're doing more and more things online, this is a growing threat as weaknesses in security become opportunities for impersonations as a gateway to fraud.
After the pandemic, identity thefts rose dramatically. According to the Federal Trade Commission, the number of identity theft cases doubled from 2019 to 2020, and while the trend has lost some of its momentum, the line still points upwards. This signals the danger for numerous businesses susceptible to such fraud attempts.
Be Extremely Critical of All Incoming Data
Data breaches are commonplace, which also means that your client’s data is probably already floating around in the dark web marketplaces. Fraudsters buy it in bulk with the intent to earn their money back by exploiting it. This puts significant pressure on your onboarding procedures, and it’s no longer enough to trust the client’s word for it.
Solutions like biometric authentication and other confirmation options largely solve this problem by disarming the leaked data sets. More advanced technical solutions recognize spoofing attempts and can instantly flag users using someone’s stolen data.
Manage Your Resources
Creating an impenetrable wall for fraudsters might not be the first thing on the low to mid businesses’ priorities list. Limited resources mean that most businesses tend to focus on critical business areas, leaving some parts unattended. This is exactly what the fraudsters are exploiting.
However, there is no need to create a full technological solution from the ground up. With the help of service providers, identity verification with due-diligence procedures can be set up overnight. This means focusing the efforts to pursue business goals rather than inventing a solution that is already there.
Don’t Let the Automation Backfire
While automation saves time and saves a lot of time that would instead be spent as manual labor, overly relying on AI can be a trap. For this reason, the final confirmation for each suspicious case should be by a human KYC specialist. This is still the ultimate way to ensure nothing suspicious about the new user.
Additional questions photo resubmissions can make a significant difference by stopping a fraud attempt. The extent of stolen data has limits, and using only it leaves many gaps, which can quickly reveal the whole picture.