4 ways to reduce your identity fraud losses

1. Encourage and help your customers to protect themselves

Educating your customers about the risks and signs of identity theft is crucial. Helping them identify risky behaviours and potential scams and providing guidance on how to protect their personal information can help reduce the likelihood of identity theft. Offering support through various channels, such as online resources, telephone hotlines, and in-app assistance, helps give customers access to support when they need it.

If customers suspect their identity has been stolen or compromised, encourage them to use a Protective Registration service such as CIFAS. This service adds a warning flag against their personal details in the National Fraud Database, prompting organisations to perform extra checks when their details are used to apply for products or services.

Regularly obtaining and monitoring credit reports is another effective way to detect unauthorised credit activity. Facilities, such as CreditLock, allow customers to lock their credit files with the touch of a button, preventing fraudsters from using their credit information to make applications. Real-time alerts notify customers if someone tries to apply for credit in their name while their credit file is locked, providing an additional layer of protection against identity theft.

2. Improve your upfront ID verification processes

Enhancing your ID verification processes is a key way to help prevent identity fraud losses. Implementing additional identity verification methods, such as Behavioural Biometrics and Document Verification, for remote interactions or high-risk customers, allows more stringent authentication processes where the perceived risk of ID theft is higher; such as when CIFAS protective registration is in place or for higher-value applications and goods.

Covert device intelligence and behavioural biometric insights can further highlight increased risk. For example, high-risk device settings, unusual geo-locations, and bot detection can indicate potential fraud. Monitoring for unnatural mouse movements and high use of autofill and copy/paste for personal information can also help identify fraudulent activity.

3. Improve application fraud detection

Ensuring that all data used for new applications is fully validated is essential for preventing application fraud. This includes verifying bank account information, email addresses, and mobile numbers to ensure they belong to the applicant, do not exhibit known high-risk attributes and are not associated with fraudulent activity. Syndicated data sharing and fraud consortia, such as National Hunter and CIFAS, can help check that application data is consistent and has not been used recently for fraudulent applications with other lenders.

4. Improve Account Takeover (ATO) detection

Account takeover incidents have been on the rise^[2], with a 22% increase in facility takeover cases reported in the first half of 2024 compared to the same period in 2023.

Fraudsters often compromise open accounts and change key details before making new applications or purchases. Using both device recognition and behavioural biometrics in collaboration is key for detecting ATO risks. Using device intelligence, such as fingerprinting and consortia data, can help recognise and trust individual devices while highlighting behavioural signs of ATO, such as data familiarity, hesitation and distraction when providing personal information.