By Michael Hiskey, Chief Product Evangelist at Socure
Conventional wisdom: be careful what personal information you place online; more information means you’re more likely to have it stolen, making you a victim of identity theft. Well sometimes, conventional wisdom is wrong.
Instant Approval
“Approval in 30 seconds or less.” Most people can get approved for a new account quickly. The approval process consists of two components: the credit decision and the consumer decision. The credit decision generally comes from proprietary credit databases and credit models, but the consumer decision—verifying that the person requesting a new account is who they claim to be, requires careful inspection, both by computers and human analysts. Increasingly, as social media networks have given us all a way to curate our own information so nicely—they’re looking to that data too.
The new credit card in your wallet, with the shiny chip that you now have to insert into the reader at the store is a remarkable device. EMV chips, as they’re called, have embedded security to help reduce fraud. Fraudsters have had to change tactics but they’re not giving up. As more people use their new chipped credit cards at point-of-sale terminals, they’re in search of easier pickings, targeting what the industry refers to as CNP or ‘card not present’ fraud; where detection is far more difficult.
Online Fraud Rates
According to FICO, CNP fraud grew 25 percent between January 2011 and September 2012; the Aité Group recently reported that U.S. credit card fraud had increased 100 percent from just seven years ago. Even worse, the analysts at Javelin Research are quoted as saying “the space that’s been hit the hardest is going to actually get hit harder yet in the next year or two.”
Minimize your chances of being victimized
Of course, maintaining powerful, unique, complex passwords, and being careful about what e-mail attachments you open, is important—that prevents “account takeover” fraud—someone pretending to be you. That said, the steady flow of data breaches in recent years have ensured the accessibility of cheap stolen card numbers and personal information, and this is the faster growing part of fraud today.
Manual Reviews
Identity verification increasingly requires human intervention. For financial institutions, this is the most time-consuming and costly part of opening a new account, and one where they’d like to find efficiencies. Increasingly, they are turning to third-party solutions to automate the decisioning process of assuring the person behind the keyboard is the one who’s information is being used, easily detecting stolen identities and helping to verify those of us that are good.
Your Digital Identity
This process is called “digital identity verification,” where the ‘data exhaust’ we all leave online naturally in our everyday lives is scoured from sites where you’ve posted or built a profile. Social media profiles (even pictures), online/email databases, mobile phone information and other public record data is combined with the traditional offline data (like previous addresses), and correlated to location (your computer’s IP address).
According to Socure, it’s the synergy and consistency of information between these digital data points that enables the best fraud prediction and the ability to verify real, authentic and trustworthy consumers. The financial institution, taking in the authenticity and fraud predictions alongside their other data sources and internal models, ultimately makes this decision.
In that context, the more consistent information about yourself across the web and public records, the less likely you are to be victimized. And while it’s possible that a dedicated crook could work to replicate your entire online persona, it’s unlikely. This kind of fraud is a volume business. If they can’t hack your identity quickly, they’ll just as likely move on to the next potential victim.
So, consider an unconventional approach to the convention wisdom. And understand why (within reason) consistently strong profiles online may actually help you avoid falling victim to identity theft and fraud and increase your ability to seamlessly making purchases and open new accounts online.
Michael Hiskey leads product evangelism at Socure, the leader in digital identity verification. Its technology applies advanced data science to bolster authentication and compliance, helping enterprises combat identity fraud, increase consumer acceptance, and reduce manual review costs.
