Fraud management

Third-party fraud — generally known as identity theft — occurs when a malicious actor uses another person’s identifying information to open new accounts without the knowledge of the individual whose information is being used.

First-party fraud refers to instances when an individual makes a promise of future repayments in exchange for goods or services without the intent to repay. First-party fraud is often miscategorized as credit loss and written off as bad debt, which causes problems when businesses later try to determine how much they’ve lost to fraud versus credit risk, and then make future lending decisions.

Account takeover fraud is a form of identity theft that involves unauthorized access to a user’s online accounts to enable financial crimes.

Synthetic identity fraud occurs when a criminal creates a fictitious identity for the specific purpose of committing fraud. This may include blending stolen or misused Social Security numbers with fabricated information to create a new, fictitious identity.

Bust-out is characterized by multiple, sudden and simultaneous consumption of credit followed by widespread default across obligations — the fraudster disappears with no intent to repay.

Fraud-detection software is a solution that monitors, detects and prevents fraudulent activity. It may be leveraged by an organization to prevent identity theft or illicit access or to root out synthetic identities or first-party fraud.