What is new account opening fraud? can make it through the application process—especially for remote bank accounts opened entirely online and via mobile—using either their own stolen identity documents or a synthetic identity built with data from a deceased person or child. Without proper checks in place, these fraudulent accounts can then be used to make illicit purchases and launder money and remain undetected for years. As a result, financial institutions can lose millions in lost revenue from these accounts.
The first step to prevent account opening fraud is to understand how criminals perpetrate these crimes. Knowing the tactics they use and the warning signs to look out for can help your team nip fraud in the bud.
Demystifying New Account Opening Fraud: What You Need to Know
Many criminals are adept at using identity theft victims’ information to pass security checkpoints during the onboarding process, especially if they use their own names and address information that matches those in the victim’s files. However, a major difference between the name on an ID and the name attached to the applicant’s social security number is often a sign of fraud.
Also, if the address on the ID doesn’t match the home or business address in the new account application, this is another sign of fraud. This is often done by fraudsters who attempt to avoid detection by supplying a fake mail drop address. This can be easily identified by checking a new account for compliance with Know Your Customer (KYC) regulations through passive liveness detection.