Fraudsters that previously focused on breaking into new accounts are now putting more attention on cracking the security barriers of older card accounts, causing the incidence of such crimes to rise, according to Experian PLC.
To tackle this problem, Experian's Costa Mesa, Calif., subsidiary plans to unveil on June 30 Precise ID Customer Management, an add-on to an existing fraud detection service to help issuers analyze existing cardholders' accounts for new types of fraud risk long after an account is opened.
The tool supplements Precise ID, which was launched in 2005 to isolate and block identity-related card fraud on new accounts, the company said.
"New accounts typically pose higher fraud risk because new data streams can create opportunities, but in recent years a decline in new account originations has caused existing accounts to become more appealing to people who perpetrate identity fraud," Kier Breitenfeld, Experian's senior director for decision analytics, said in an interview. "Existing accounts are usually in good standing and present valuable targets, so fraudsters are starting to step up attacks on them."
The most common type of fraud to befall older accounts is an account takeover, wherein criminals intercept credit card identity and security details and redirect accounts for fraudulent purposes, Breitenfeld said.
The rise of social network use among consumers also is giving criminals new ways to break into existing accounts, he said.
"Identity and demographic information is increasingly exposed to criminals through social networking and online scams, making existing accounts more vulnerable than in the past," Breitenfeld said.
Fraudsters might gather information such as cardholders' names, birth dates, addresses and other data from social networking sites and use it to gain unauthorized access to accounts, he said.
And criminals also are relying on new types of malware to break into older accounts, Julie Conroy McNelley, a senior risk and fraud analyst with Aite Group, said in an interview.
"Fraudsters taking over existing accounts is becoming more common because the malware is so good and sophisticated that criminals can work very fast," McNelley said.
Precise ID Customer Management helps to block account takeovers by monitoring suspicious activity and inquiries within existing accounts, assigning a score that measures heightened risk. Lenders may use the tool to automatically scan accounts at risk for takeover, based on the number of suspicious inquiries, and block the fraud before it succeeds.
The new tool expands a card issuers' view of account activity to include millions more "identity transactions" by third parties, such as credit bureau inquiries and others seeking account holder authentication.