Massive Identity Data Exposure Leads to Rising Tides of New Account Fraud — What’s Next?

Financial online fraud and the fuel that feeds it has been growing steadily over the past decade, resulting in losses to banks, businesses and individuals, especially with cases of new account fraud (NAF).

The challenge online service providers face nowadays is not only an increase in NAF, but also in NAF’s sophistication and the difficulty to detect it in its early stages due to the convincing nature of the elaborate data sets criminals are using to open new accounts. The detection issue is compounded by the fact that 41% of NAF uses real identities with correct personal information.

The Value of PII and PHI

Personally identifiable information (PII) and personal health information (PHI) have been lucrative targets for cybercriminals for almost two decades. Different sets of information, including a person’s name, address, Social Security number, date of birth and other details are most often joined with financial information, such as payment card data or account credentials, and then sold online to enable criminals to falsely use compromised identities.

Cybercriminals commonly obtain these details through phishing attacks, information-stealing malware, keyloggers and data breaches from different sources. However, data can also be lost or stolen due to oversight or physical theft. Even the oversharing of personal information on social media has become a source of personal data for fraudsters. Similarly, threat actors steal private information by obtaining credit reports on potential victims, buying background checks and scouring genealogy sites.

Fraudsters typically use this stolen data for basic financial fraud, but cases of NAF have been growing and expanding to new verticals as more services are offered to customers online. With this growth in the scope of digital account creation, new customers arrive, but not all are legitimate.

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