Equifax: Identify Your Clients - Jim Broom and Neil Munroe




Companies urgently need to check the identity of their clients to help counteract the growing problem of fraud. Equifax’s Jim Broom and Neil Munroe tell Jim Banks how businesses can face up to this challenge.

The move towards chip and pin credit card authorisation has not only highlighted the successes that business can score against consumer fraud, but has also hinted at the scale of the problem.

A study updated by the UK Home Office in 2006 estimates that consumer fraud costs the economy £1.7 billion a year, while Companies House estimates that there are 130,000 incidents of company data manipulation each year.

Chip and pin has made card fraud more complicated, so fraudsters have increasingly moved towards identity and application fraud, assuming or creating false identities and making fraudulent applications for anything from new bank accounts and loans to credit cards.

IDENTITY AND APPLICATION FRAUD

Jim Broom, sales director for strategic accounts at information solutions company Equifax, says, "Identity fraud and application fraud are growing at 14% per annum, so the problem is always getting bigger. There is also a reluctance to disclose fraud, which often gets wrapped up in bad debt, although companies are actively addressing the problem, which suggests that they know it is happening."

In addition, online marketing presents new opportunities for fraudsters. Companies may well be under pressure to make quick decisions on new applications, but they cannot afford to cut corners when verifying customer details. A business must know who it is dealing with.

Neil Munroe, external affairs director for Equifax, add, "For new account take-ons, companies should check the identity of the applicant, not just the credit risk profile. Fraudsters always have the best credit profiles because they steal or manipulate them.

Companies must also ensure there is no account takeover during the relationship with a customer."

INITIAL FRAUD CHECKS

Over the last two decades credit checks have become part of the application process, alongside sales and marketing, as the latter dislikes live contacts being rejected further down the line. This is also among the many reasons why solution providers such as Equifax now believe that fraud checks should no longer be an afterthought – they should be conducted at the initial point of contact.

Munroe notes, "The facility is now available to synchronise the fraud team with the account opening department. Equifax helps integrate finance with sales and marketing. Credit checking has been moved to the front line and the pressure is now on finance directors to move fraud checking to the front line, too."

SIRAN – ONLINE FRAUD PREVENTION

Among Equifax’s offerings is SIRAN, a comprehensive online fraud prevention tool that assists lenders in assessing potential fraud. It uses a cross-industry universe of applications and known or suspected frauds to check individuals and enable organisations to integrate fraud investigation and account opening teams.

The tools, however, are only part of the antidote to soaring levels of application fraud. The first step a company must take is to be honest about the problems.

Broom explains, "Acting to reduce fraud is already a tacit acknowledgement that it exists within a business. Companies do not always recognise, however, that there is a material business benefit to tackling fraud – the money that you stop the fraudsters taking goes straight on the bottom line."

To arm themselves against attack, companies must accept the challenge of verifying that customers are genuine at the first contact. Once they have accepted this, they need to invest in the right software and keep their antifraud measures up-to-date so that they can keep ahead of the fraudsters.

Equifax’s Jim Broom, sales director for strategic accounts and information solutions.
Neil Munroe explains how companies should check the identity of their clients to combat fraud.
SIRAN, a comprehensive online fraud prevention tool assists lenders in assessing potential fraud.