IDENTITY FRAUD
A TALE OF TWO SOLUTIONS
The trend is well known. According to the Federal Trade Commission, identity fraud – increasing by 300% a year - is the fastest growing crime in the United States.
Needless to say, legislators have been busy. But can you stop identity theft with a new law? Should federal or state laws require that the picture id of a credit applicant be examined before issuing a new credit card? Or make someone applying for credit wait for the creditor to confirm them through a second contact?
With the trend of business moving toward faster credit approvals, lawmakers aren’t likely to slow the process down.
A second solution is the security freeze. A security freeze is a notice placed on a consumer report at the request of the consumer. It prohibits a reporting agency from releasing a credit report or credit score without the express authorization of the consumer.
The downside of freeze laws is that they can hurt the pace of business. Shopping for credit has to be planned. Consumers have to remember their password to temporarily lift the freeze. They have to remember the credit bureau’s contact information; and follow all the appropriate steps. There may even be fees involved.
If legislation and consumer-driven initiatives have significant downsides, are there other options?
Businesses could make the difference. By proactively leveraging new technologies to identify and decline fraudulent applications businesses stand to help their bottom line, preserve an active business climate and earn consumer trust. This in turn may help prevent consumers from approving damaging legislation or taking measures on their own that ultimately hurt business in the long run.
REDUCE FRAUD WITH A FICO GRID SCORE
Deploying deploy Fair Isaac's custom neural network models built upon Industry data, combined with industry consortium information, a FICO GRID score allows businesses to reliably detect the two most popular types of identity fraud
Imposter Fraud – those applying for credit under a stolen identity
Account Abuse – those applying for credit with no intention of paying
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