New account fraud can be devastating to consumers and organizations. Whether you’re a financial institution, retailer, or e-commerce company, detecting and preventing new account fraud can save you money and protect your brand. This type of fraud is often perpetrated by a nefarious actor who poses as a genuine customer.

Fraudsters can use stolen identities or synthetic identity to open a new account. In some cases, criminals using manufactured synthetic identity fraud can operate for years without being detected. These fraudulent accounts can be used to make purchases on the secondary markets. They can also max out their credit lines. Using a fake identity can lead to a number of different types of scams, including social media fraud, phishing, and even hacking.

Luckily, a number of fraud detection solutions are available to detect and prevent new account fraud. Detecting new account fraud involves relying on red flags that occur during the creation of the account. The Association of Certified Fraud Examiners is one of the leading authorities on preventing and detecting new account fraud.

New account fraud occurs when an individual uses their own or a counterfeit identity to open multiple bank or credit card accounts. Typically, these transactions are not unauthorized, but if the fraudster uses a forged card to make payments, the issuing bank will most likely charge the merchant for the fraudulent activity. It’s important to monitor all new accounts closely to identify potential fraudulent activity, and to avoid a chargeback.

During the first 90 days of an account’s life, the vast majority of new account fraud is committed. For this reason, it’s vital for financial institutions to implement an effective new account fraud prevention strategy. To do this, it’s important to understand the risk factors associated with opening a new account. Banks can implement systems that can detect new accounts, analyze financial history, and check theĀ detect new account fraud applicant’s personal information.

Another option is to use a credit monitoring service to alert you if there are any signs of fraudulent activity on your account. Some credit monitoring services offer fraud alerts based on behavioral, social, or transactional data. A credit monitoring service also can detect unusually high or low transactions on an account.

While there are a number of fraud detection tools on the market, the most popular is IBM’s Trusteer. Originally developed to help banks identify suspicious activities in the banking industry, the system remains a powerful tool in detecting and preventing new account fraud.

As a result of the rapid growth of online accounts, fraud is becoming increasingly difficult to detect. However, a growing number of companies are developing specific services to detect and mitigate suspicious activity on new accounts. Among the most important features of these services are a custom database that includes demographic and behavior data to better understand an applicant’s behavior. Behavioral analytics tools can help detect fraud indicators like a high credit utilization rate, high debit balances, and unusually high transfers.

OneSpan Risk Analytics can provide financial institutions with a real-time view of all new accounts. The software can track all transfers in and out of an account and beyond salary data.