Going Beyond Transactional Fraud With Identity Data

Typically, merchants use identity data to prevent transactional fraud and use real-time identity verification in order to keep fraudsters from making a purchase. But lately, we’ve seen a trend among some of our merchants toward using identity data earlier in the customer journey to improve the customer experience and reduce the risk of fraud.
Fraud trends are always changing, and one common way we’ve seen fraudsters going after companies is by using synthetic IDs to game rewards programs and other systems set up to benefit legitimate customers. While this kind of fraud may not be as visible as transactional fraud, it can be equally as costly.
We spoke to one Ekata customer about how they are using identity data earlier on in the customer journey to keep fraud out.
Preventing coupon fraud in the rewards program
Many merchants use loyalty programs in order to reward and retain customers. Typically, these programs allow customers to create an account that lets them earn rewards or points for every purchase. The customer we spoke with has an ongoing campaign to re-engage lapsed loyalty program members by automatically sending coupons to members who haven’t made a purchase in a while.
Unfortunately, fraudsters have begun to realize that if they sign up for massive amounts of loyalty program accounts using synthetic IDs, they will eventually receive massive amounts of coupons that are not tied to any specific user ID.
Similar to gift card fraud, fraudsters make money by selling these coupons online for a fraction of the amount. Not only does this result in fraudsters profiting off customers, it also means that the coupons meant specifically for re-engagement are falling into the hands of non-loyalty program customers.
Vetting new business accounts
The Ekata customer we spoke with is also planning to use identity data to cut down on non-transactional fraud in their business membership program. This B2B program offers business accounts member-exclusive perks, special pricing and discounts, and a line of credit. In order to continue offering this program to legitimate customers, they need to shut out bad actors.
This company plans to use Ekata data in order to check legitimacy before either extending customers a line of credit or signing them up for a business account. This serves two purposes:
First, it will keep fraudsters from opening B2B accounts using synthetic identities in order to access lines of credit or other B2B member perks.
Secondly, the data allows the account approval team to score applicants for the program in terms of account potential. This will allow them to focus more resources on business accounts which will ultimately be the most profitable—and to shut out fraudsters before wasting time making a credit decision.
Making identity data part of your workflow
Along with informing a robust rules engine to help flag potentially fraudulent transactions, identity data can also be used at the top of the funnel to verify signups for loyalty programs, B2B programs, and other customer rewards programs. This means fraudsters are shut out before they even get far enough to attempt a transaction.
Agents can run a search using our new solution Pro Insight, the only global identity review solution that provides six ways to search, robust analytics and admin tools, direct workflow integrations, and a clear and focused user experience. It allows customers to quickly verify and cross-check data points like email address match, address verification, phone number verification, and age of website domain (especially important in the case of business customers). It also returns linkages between all of these data attributes, giving the representative an even better idea of the legitimacy of the person trying to create the account.
Learn more about how Ekata can help you identify synthetic identity fraud near the top of your funnel to reduce risk and preserve your company’s resources for your best customers.

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