New account fraud protection involves verifying that a new customer is real, not a criminal. This is important as fraudsters create new accounts to steal and launder money, obtain goods and services they wouldn’t otherwise access, or for other fraudulent purposes. These can include opening accounts with banks, credit card companies, retailers, peer-to-peer payment services, and more. Fraudsters often try to evade onboarding and authentication methods by using stolen identities.

One way they do this is by supplying a false home address on application documents so their identity won’t be linked to the new account. Another way is by supplying a fake email address, which will make it more difficult for fraud teams to track them down. Finally, they may also use pseudonyms, aliases, or nicknames to hide their identity, which can make it harder for security software to catch them.

Smart Solutions: How to Protect Your Business Against New Account Fraud

To help fight these tactics, FIs can train their staff to look out for behavioral cues that could indicate fraud. These might include an applicant being overly friendly or trying to build a rapport quickly, or they might dress in a manner inconsistent with their stated age, occupation, or income level. Alternatively, they might request an immediate cash withdrawal upon deposit or want to open a large quantity of temporary checks.

In addition to a thorough KYC process, which should always be carried out before an individual is given a new account, FIs can also use iProov’s biometric verification to verify that an individual is who they say they are. This combines traditional fraud monitoring with AML instruments to give businesses a holistic approach to fighting fraud at the new account stage and beyond.