Online credit card application has made life so easy. It also made online fraud easy as well. Online credit applications have come up with a number of tricks to indulge users to reveal their credit card information and approve online transactions fraudulently. The challenge of differentiating between genuine and non-genuine applications is difficult to detect since these disguises come in a thousand ways. If you have fraud detection tools, they may server you well, but believe it or not, they may not be offering the strongest lines of defense. Complex schemes have already been devised that seek to circumvent conventional methods of fraud detection such as IP addresses, credit reports and geo-location validations. All these tools are becoming less effective each passing day.
For fraudsters, credit card application theft is not even the main goal. This is just the entry point from where they can employ other types of fraud including account takeovers, money laundering and chargebacks. You need to expand your fraud detection capabilities by deploying effect solutions that work together with existing tools. Having a comprehensive and efficient solution for fighting identity theft and other fraud should be an ongoing endeavor for any industry that seeks to protect its online data.
According to the Federal Trade Commission (FTC), identity theft is growing at a staggering 20 percent each year and 50 percent of customers have complained of fraudulent credit cards issuance in their name. The internet is now commonly being used as a conduit for buying, selling and trading and thus, online credit application will continue to pose a high risk to issuing banks. Internet-savvy criminals are persistent individuals who work extremely fast to apply for credit with as many online merchants as possible once they get hold of stolen IDs. Minutes after credit card information is stolen can equate to thousands of dollars. If fraud is not detected early, credit issuers can also suffer financial setbacks and legal penalties that can significantly impact their bottom line.
For example, a fraud credit card application can cost issuing banks additional time-consuming fraud tools and validation checks that can drive up the average cost significantly to decision an application. High fraud rates may also force a bank to close entire channels significantly resulting in revenue loss due to lost business opportunities.
Unfortunately, in order to offer better protection against a fraud credit card application, credit issuers have been forced to deploy tools that rely on even more personal information. Ironically, this has left the issuing banks more susceptible to identity theft. Different techniques will definitely be needed to reduce the rate and impact of identity theft.