Fraud Risk Scheme:
Credit application fraud under false identity occurs when a fraudster uses stolen documents or falsified information (identity documents, proof of address, pay slips) to take out a loan, consumer credit, or open a bank account. The goal is to obtain funds or goods that they do not intend to repay. Often, the fraudster uses a composite identity (a mix of true and false information) to deceive traditional identity verification systems.
Detection:
Recent and unusual deposits before a credit application: Monitoring customer accounts that receive significant or unusual sums shortly before submitting a loan application. These deposits are often made to simulate immediate solvency.
Multiple rejected credit applications: Identification of a customer (or an identity) who submits several consecutive loan applications to different financial institutions within a very short period of time.
Prevention:
Cross-referencing with national files (anti-fraud databases): Systematic verification of identity information (surname, first name, date of birth, address) against official databases or files shared between institutions to ensure that the identity has not already been flagged or used fraudulently.
Reinforced identity verification: Requiring strong authentication, such as video verification, taking a selfie with the identity document (facial biometrics), or verifying income sources with third-party organizations.
Share your feedback:
What tools, techniques, and processes are used in your organization to detect and prevent such fraud schemes?
