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What Is Application Fraud?

Application fraud refers to the submission of an application, typically to financial institutions or businesses in an effort to obtain credit or financing using someone else's personal information (stolen identity) or even fake information (synthetic identity).

Fraudsters use many different ways to obtain personal information from their victims.  Once they acquire personal information they attempt to commit application fraud by applying to businesses in an effort to open an account which they will then use to obtain products or services with no intention of ever repaying the debt.

Online loan or policy applications create unique opportunities for fraudsters.

How iovation Helps Detect & Stop Application Fraud

When a user begins the application process at your site, you are at risk for application manipulation and identity fraud. The insurance and online lending industries both frequently contend with application fraud. It’s critical to gain insight into the patterns of behavior that fraudsters display when applying in order to stop them before a loan or policy is issued.

You need to understand the difference between customers you can trust and fraudsters working deliberately to manipulate your system. Device-based intelligence gives you the edge you need to recognize and stop application fraud.

Application manipulation—when a user fraudulently changes information to gain more favorable terms—is an issue that device-based fraud prevention can detect and flag for risk. Fraudsters also target online applications using stolen identities. In the online lending space this often leads to loan default. 

We Identify High Risk Device Behavior Patterns To Stop Fraud

Our Fraud Prevention solution identifies specific patterns of device behavior that indicate risk during the application process. Device-based intelligence is often the first line of defense against application fraud because it effectively identifies and recognizes all internet-enabled devices that visit your site. If a device has a known history of fraud, you’ll immediately know the type of high-risk behavior it’s been involved with plus any links it has to other accounts or devices.

Our multi-layered approach effectively stops frauds during the application process because we:

  • Detect and flag suspicious devices (web and mobile)
  • Identify high-risk locations and networks
  • Detect location masking to reveal a fraudster’s true location
  • Uncover evasion detection strategies
  • Track velocity risks like multiple new devices per application
  • Provide insight from client-shared fraud and our device reputation service

Device Reputation Helps Prevents Repeat Offenders

Our massive device reputation database (with over 50M confirmed reports of fraud and abuse), is used to track serial offenders.  When processing a new application, our customers can check to see if this particular device has a past history of application fraud or is associated with other devices and accounts that do.  Having this knowledge, helps them stop repeat offenders of application fraud.

Customize Rules To Target High-Risk Behavior 

Use our business rules editor to flag patterns of fraudulent behavior specific to application fraud. Every type of fraud has its own high-risk patterns. Easily set-up custom business rules to flag suspicious transactions. Rules can be added, adjusted or deleted on the fly, with immediate impact.

Watch the video below to see how iovation authentication and fraud prevention solutions help prevent application fraud.

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