In many online transactions, businesses need to know that they are dealing with a real person - but don’t need detailed information about who the person is. Fraudsters often create fake or synthetic identities using a combination of real and fabricated information. Preventing synthetic identity fraud is about interrogating incoming identities during the application process to stop fraud before it gets past your front door.
Equifax provides a risk assessment score for that indicates the likelihood that information presented in an online or electronic application is fraudulent. Identity verification involves screening of applicant information to test for data inconsistencies and irregularities. This screening includes checking for details such as data that has been reported as belonging to a deceased consumer and the validation of driver’s license formats. Verification also leverages a pattern recognition algorithm that is conducted on each transaction. For example, a velocity parameter determines the number of times an applicant has applied for authentication in a specific time frame.
The solution uses a “waterfall” approach in gathering validation information from multiple data sources. This means that if the identity cannot be validated using the first data source, it proceeds to the next data source until the identity is either validated or returned for manual review. A statistical model then generates a score that provides an overall assessment of fraud risk for an applicant.