Account takeover and new account fraud have seen a dramatic rise in recent years as fraudsters have focused on obtaining readily available personally identifiable information (PII) on target consumers. Getting and maintaining control over consumer PII is essential to combat this fraud.
Preventing this type of fraud starts by following rigorous procedures to identify individuals. The ADI Association ensures that ADIA accredited Issuers follow strict ID Proofing guidelines when issuing verifiable identity credentials to consumers. These credentials allow consumers to gain control of their PII in the credit process.
Financial institutions and credit bureaus could collect and verify consumer pre-authorization to release credit information to named recipients. Placing the consumer in control of the data to be shared and with whom it is shared prevents new accounts from being established without all parties’ prior approval and eliminates the more than $5B in new account fraud costs for the financial industry.
By leveraging ADIA-compliant identity credentials, financial services can prevent existing account takeover as well by ensuring that only verified users can access or make changes to existing credit or financial accounts. Implementing consumer-friendly, proactive controls here would help prevent the more than $6.5B in account takeover fraud that occurs annually.