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Taking a Multi-Tiered Approach to Fight

the Growing Ways Fraudsters Operate

By Angelica Jeffreys, Automotive Financial Services Executive, Equifax

Fraud. It’s a term that is often identified Sophisticated Fraud Alerts can provide real-time payment options
by the abuse types or tactics used by As organizations shift more of their leveraging a suite of sophisticated data to
perpetrators: account takeover, payment operations to digital, fraudsters are the consumer while limiting risk of card-
fraud, malicious content, and synthetic focusing more of their activities on things not-present fraud.
ID. This siloed use of terminology has like new account fraud and often creating
contributed to the belief that fraud activity new, fraudulent identities or synthetic Aside from payment options themselves,
is siloed. However, fraudsters don’t rely on identities. Synthetic identity fraud is lenders and dealers are now leveraging
single activities or single types of abuse. built on the foundation of a fictitious sophisticated data from partners and
Today’s fraud network is comprised of identity, often created with a combination carriers to authenticate a consumer’s
various, interconnected relationships of of real data and fabricated information. identity. This allows for pre-population
Fraudsters then attempt to gain credit with
different abuse tactics. of consumer data during online checkout
the fictitious identity to monetize it.
or form completion, providing a simpler
In the new digital-centric world, fraudsters These manufactured identities are used experience with less friction. Businesses
are leveraging vast amounts of digital for short-term gain and then abandoned. then benefit from quicker and easier
content for the purpose of false information, When this is the case, there is no one for digital consumer verification and lower
financial fraud, and phishing attacks. Using the lender to contact to collect funds. transaction abandonment.
different web forums, marketplaces, and This poses a problem for organizations as
social media channels across the internet, these misclassified non-payment matters While this technology is important,
fraudsters create spam and scam attacks get sent to collections, further wasting dealers and lenders are going one step
to trick everyday consumers into sharing resources. Lenders and dealers are now further. To fight fraud effectively without
sensitive information — later sold or used setting up sophisticated alert solutions that disrupting the consumer’s experience,
to steal rewards, store credit, or even cash can help protect businesses from losses organizations are changing how they
and identities. associated with synthetic identity fraud approach identity authentication and
while minimizing false positives. Delivered
Seeing Fraud from a Holistic Viewpoint in batch or real-time, the alerts use patent- fraud prevention in today’s digital era.
Whether it’s ransomware, loan stacking, pending ML algorithms to detect synthetic Through layered authentication practices,
loan fraud, payment fraud, or something identity behaviors and patterns at various dealers and lenders can vet consumers
else, fraudsters don't take a singular entry points. properly, accurately, and thoroughly at
approach to attacking businesses. the first point of contact to develop a
Therefore, there's no such thing as a single Advanced Identification & Payment Solutions baseline for subsequent interactions with
fraud solution. Addressing the various Mobile devices are the new normal each consumer. This enables businesses
forms of fraud requires auto lenders and for today’s on-the-go consumers. The to determine if consumer behavior is
dealers to leverage the right tools at each changes in technology and offerings to consistent or if there's an anomaly that
stage of the customer journey. accommodate mobile consumers drive might indicate fraud. The impetus to get
even higher expectations to transact with digital authentication right the first time
Intercepting fraud requires a ease. If their experience aligns with their provides dual protection for the business
multidimensional approach. Using expectation, consumers are more likely to and the consumer.
multiple fraud point solutions is overly complete transactions and repeat them.
complex and difficult to manage. Lenders Fraudsters know there is no single-
and dealers today are leveraging solutions Low friction experiences are expected. source tactic to steal a victim’s identity
that provide a holistic view of their fraud
risk, correlated across a growing number When consumers encounter friction in or perpetrate into the inner system of
of channels. These solutions use advanced a transaction, they tend to abandon it. a business. Businesses involved in the
analytics, artificial intelligence (AI), This leads to both lost revenue and the automotive industry are also realizing
machine learning (ML), and intelligent opportunity to gather valuable consumer that there is no single-source tactic to
data orchestration to provide risk insights. As such, lenders and dealers are fraud prevention and are now taking
managers with insights to help manage using API-based payment enablement important steps to cover all possible
fraud decisions throughout the customer tools that streamline the way consumers bases to thwart the rising threat of
journey. make online payments. These businesses fraudulent activity. n

6 | MIADA MISSISSIPPI DEALER Q1 2022