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Fraud management tips

Is fraud hindering your financial institution?

Whitepaper: Protecting the customer experience

Customer’s personal data can often be extremely valuable to criminals and identity fraud has recently been flagged as a considerable hazard. And more can be done to protect yourself and your customers. Is your financial institution finding it harder to prevent and manage fraud? Are you struggling to combat new and emerging threats that are impacting your customers? Are you protecting your institution and customers from fraudsters?

Recently, Experian has found that institutions are struggling to find a balance between compliance requirements and conveying empathy through great customer service.  In order to keep customer’s data safeguarded and their banking as enjoyable as possible, institutions are tasked with trying to find the right strategy. The fraud landscape is getting increasingly complex as fraudsters become even more digitally and technologically savvy.  After conducting research, we have identified several fraud management tips and online fraud trends to protect your financial institution and customers from fraudsters. 

Top fraud schemes affecting businesses

Credit card fraud

Credit card fraud is an ever-evolving, ever-growing form of theft and fraud that is most often linked to identity theft. The most widespread purpose of credit card fraud is to obtain goods using someone else's account information. Consumers who mistakenly give their credit card number to fraudsters, lose their credit cards, or whose accounts are hacked are in danger of being victims of credit card fraud.

Application fraud

Application fraud is in the same realm as credit card fraud. In this instance, a fraudster will attempt to apply for a new credit card using false information or stolen information from a consumer.

Chargeback fraud

Chargeback fraud is similar to friendly fraud in the sense that a chargeback request is made despite having received the actual goods or services. Chargeback fraud, however, is different in that it is malicious in intent and is premeditated.

Friendly fraud

Friendly fraud occurs when a merchant receives a chargeback because a consumer denies having made a purchase or having received their order, when in fact they did. This type of fraud isn't always malicious, as there are some cases where the order could have been placed by a family member or friend with access to the actual cardholder's information.

Account takeover fraud

Account takeover fraud is a type of identity fraud that occurs when fraudsters change or add information to an existing account. This is done so that they can gain access to a consumer's funds. For example, a fraudster may add their name to someone's account details, or change address or email information.

Current online fraud trends

Rising account takeover fraud

Data breaches, hacking, phishing, pharming, and botnet activities that are completed successfully provide criminals with a wealth of stolen consumer information that can be used to commit account takeover fraud. A study conducted by Cifas shows that account takeovers have increased by 45 percent from 2015 to 2016.

Targeting of loyalty points

Fraudsters are now targeting retailers' loyalty programs as another avenue for fraudulent activity. They use stolen customer information and identities to pilfer loyalty program rewards.

Increasingly mobile consumers

Traditional fraud prevention tactics will need to improve to keep pace with constantly evolving malware. With e-Commerce purchases projected to increase to $2.4 trillion by 2019 (via WorldPay), fraudsters are moving to card-not-present (CNP) environments, such as mobile commerce.

Frustrating false declines

In an effort to deal with rising fraud, retailers are getting more aggressive in how they combat criminal activities. This, however, can result in a legitimate transaction is rejected - otherwise known as false declines or false positives. False declines can be caused by identity-related, technical, or structural problems like conflicting account information. These declines are becoming more costly than actual fraud. Business Insider estimated false declines costing retailers about $8.6 billion in 2016, higher than the $6.5 billion in actual fraud they've prevented.

Growing global transactions

We are purchasing more and more. This means, though, that fraudsters have growing opportunities to commit criminal activities using the wealth of personal data now out there. The rise in device usage also means a rise in device hijacking for illegal activities. A study conducted by Juniper Research shows that by 2022, the cost of card-not-present (CNP) fraud will be $19.3 billion. 

Defeat potential fraudsters today

Experian's CrossCore standalone platform can assist your financial institution in adapting and evolving a fraud management solution easily and affordably. Our platform detects new fraud, helps reduce risk, and improves your customer loyalty.

 CrossCore fraud prevention platform



Learn how Experian's CrossCore platform can assist your financial institution in adapting and evolving a fraud solution easily and affordably. 


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