![]() ![]() The fraudster may attempt to impersonate an existing cardholder, or create a synthetic “Frankenstein” identity with bits swiped from multiple individuals. The data used to create the account may be stolen, obtained through devious techniques such as phishing, or purchased off the dark web for pennies. How Does New Account Fraud Work?Ī new account scheme starts with a fake payment account that, for all intents and purposes, looks like the genuine article. Once the fraud is eventually discovered, the merchant will be left holding the bag. The fraudster then uses that account to make purchases. In a new account attack, the scammer will use stolen information to create a new user profile and try to get a bank account. ![]() New account fraud is a third-party fraud tactic. Until the fraud is uncovered, the personal information on the new account is considered legit. Most fraud detection solutions verify shoppers using information on file with the issuing bank. With new account fraud, however, even the most advanced anti-fraud tools may not be able to flag the buyer as phony. This can occur at either the banking or the merchant level, with fraudsters using stolen or synthetic identities to secure new credit or debit cards.įraud in the eCommerce space is nothing new, of course. New account fraud occurs when a fraudster adopts a false identity to create a new payment card account.
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