Identity theft

After a California woman spent more than a decade obtaining reparations for Nazi plundering of her family's belongings, the money disappeared from her bank account. Her saga highlights a gap in fraud cases between what consumers expect from their banks and what those banks are in a position to deliver.

Fraud has evolved to defeat existing federal Customer Identification Program requirements. It’s time for regulators to modernize them.

Criminals' efforts to steal identities and take over accounts have become increasingly sophisticated. Banks must upgrade their mitigation processes, which can be held back by antiquated systems and organizational silos.

Fraudsters use different tactics based on their intended victims, and banks like Republic Bancorp and Wells Fargo are targeting the kinds of notices they send — and which channels they direct them to — in response.

Scams in which a real person’s information is used to create fictitious businesses or individuals have led to $6 billion in credit losses. The Federal Reserve has developed a standard definition for synthetic identity fraud so lenders can distinguish it from traditional identity theft.

Some say Equifax, Experian and TransUnion are too slow to investigate grievances, prompting more complaints to the Consumer Financial Protection Bureau. But the big three say other forces are at work.

PaymentSource's Daniel Wolfe sits down with Carey O’Connor Kolaja, AU10TIX's new CEO to discuss the rise in synthetic fraud, the fastest-growing financial crime, and how payments security has been changed by the pandemic.

Since July, Visa has noticed an uptick in unemployment insurance fraud with prepaid cards being used as a key disbursement vehicle. And the best solution may be rooted in technology, not law enforcement.

As many businesses and consumers have been forced to deal with the difficult conditions thrust upon them by the COVID-19 pandemic, so too have fraudsters needed to make adjustments just to continue their life of crime.

Axcess Financial is using stronger authentication, studying up on bad actors and planning to use a federal service that automates verification of Social Security numbers.