Account Sign Up Fraud Detection

account sign up fraud detection

Account sign up fraud is a major concern for businesses as they move their operations to the digital space. While the benefits of digitized onboarding procedures are undeniable, fraudsters have been quick to adapt and exploit new account opening processes. Detecting this type of fraud early on is critical to avoid costly and potentially devastating consequences down the road.

New account sign up fraud detection often takes the form of a scam to open a duplicate account or simply taking advantage of promotional items such as free credit cards and services. More sophisticated fraudsters may attempt to sign up for a service using stolen information gathered via data breaches or from a legitimate account that is then repurposed for illicit activity.

Guarding the Gateway: Techniques for Account Sign-Up Fraud Detection

To detect this type of fraud, systems such as OneSpan Risk Analytics monitor all new accounts closely and in real time — especially during the first 30 days when new account fraud is most likely to occur. This includes tracking dormant-to-warmed-up accounts; tracking high transfers in/out that don’t make sense based on salary data in the customer application; and monitoring for signs of mule activity (for example, multiple accounts with different payees).

A robust security solution will also be able to analyze passive signals, including social media lookups, IP address checks, and device fingerprinting, to quickly assess user identities and flag suspicious behavior. This type of technology is crucial to catching not only dumb bots but sophisticated human fraudsters who can appear to be good users.

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