{"id":17890,"date":"2021-01-06T06:00:49","date_gmt":"2021-01-06T14:00:49","guid":{"rendered":"https:\/\/www.trulioo.com\/?p=17890"},"modified":"2023-08-01T16:27:34","modified_gmt":"2023-08-01T16:27:34","slug":"fraud-prevention","status":"publish","type":"post","link":"https:\/\/www.trulioo.com\/blog\/fraud-prevention\/fraud-prevention","title":{"rendered":"Fraud prevention: Strategies, tactics and best practices"},"content":{"rendered":"\n

With the threat of fraud rising globally, it\u2019s vital that organizations implement effective fraud prevention<\/a> processes that are adaptable and secure, while still ensuring good customers can onboard and transact quickly and seamlessly.<\/p>\n\n\n\n

In 2019,  identity fraud in the U.S<\/a>. was estimated at $16.9 billion. One article points to 41 different types of fraud<\/a>, and while not all will be applicable to each organization, it does indicate the variety and depth of fraudulent activity that needs consideration.<\/p>\n\n\n\n

Likewise, the threat of cybercrime is increasing, with the annual cost to the global economy from cybercrime<\/a> estimated to rise to $6 trillion by 2021. Viruses, ransomware, phishing and many other digital threats pose a significant risk of fraud. Cybercrime can also cause compliance failures, either from the act itself, from non-reporting, or by weakening control systems to hide illicit activities.<\/p>\n\n\n\n

Understanding these threats and how fraudsters use technology to create new opportunities is an ongoing necessity. It\u2019s mission-critical for organizations to have holistic anti-fraud systems that are robust and can quickly adapt and deliver security and protection with minimal customer friction.<\/p>\n\n\n\n

Types of online fraud<\/h2>\n\n\n\n

As Cathy Liu, Head of Fraud Prevention at Bolt states, \u201cFraud is a moving target, and the best protection is one that grows with your business. Fraud is such a difficult problem because fraudsters are constantly innovating<\/a>; therefore, fraud prevention solutions must also innovate to remain one step ahead.\u201d<\/p>\n\n\n\n

Below are just some of the online fraud schemes that organizations should consider as part of their fraud strategies.<\/p>\n\n\n\n

New account fraud<\/strong><\/p>\n\n\n\n

New account fraud<\/a> usually occurs within 90 days of account opening. Also referred to as application fraud or account origination fraud, the occurrence of fraud so close to account opening indicates the account’s creation was not for proper business purposes.<\/p>\n\n\n\n

For businesses, new account fraud is especially dangerous as there’s no track record to compare to, no existing relationship, and no history of trust. The initial activities might be benign or they may be acts of fraud yet to be uncovered.<\/p>\n\n\n\n

The worldwide increase in data breaches has led to wide-spread black-market access to so-called \u201cfullz,\u201d a full set of identity data that can be used for account opening. As hackers point out, \u201cBuying identities<\/a> was so much better for them than stolen payment card data, because card data could be used once or twice before it was no good to them anymore. But identities could be used over and over again for years.\u201d<\/p>\n\n\n\n

Card-not-present<\/strong> (CNP) fraud<\/strong><\/p>\n\n\n\n

As digital transactions are categorized as card-not-present (CNP), there are substantial risks of CNP fraud \u2014 and the merchant is liable for any costs incurred.<\/p>\n\n\n\n

An effective CNP fraud prevention program<\/a> is about risk mitigation. By understanding the techniques used by fraudsters, the fraud reduction tools and techniques available, and your organization\u2019s risk strategy<\/a>, you can develop and operate a program that contains costs while still being consumer-friendly.<\/p>\n\n\n\n

Online merchants are required to meet the Payment Card Industry Data Security Standard (PCI). The PCI is an industry group for payment organizations to develop standards for payment data security. The following image details how PayPal addresses the standards:<\/p>\n\n\n\n

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Additional security measures in credit cards include:<\/p>\n\n\n\n