Fraud applications are one of many fraudulent activities in which identity theft takes place. In this situation, the fraudster applies for an account, any service, policy, or insurance claim using fake material and information of another person to influence the outcome of that application. These imposters use false employment details, untrue income, or a concealed address.
Customers applying for credit like mortgage loans, credit cards, and car loans always look for ways to make their application approval processes quick and without a bump.
This has become easier with digitization, and digital lending is becoming a norm. However, there is a catch to it. With ample convenience with digital lending, it also is a great platform for fraud opportunities for imposters who use state-of-the-art tools such as bots or any other hacks to drive massive application fraud attacks.
How Are Fraud Applications Made?
The issue of identity theft is real. If you have ever suffered from fraud applications under your name, it means that the details were stolen and used to open up a new account.
Fraudsters usually urge to make fake accounts with banks or credit card companies. Why so? Because it is a quick solution to gain access to funds with the details of the victim. Not only bank accounts, these imposters may use your details to open accounts some place esle, such as a mobile contract in the victim’s name.
Applications fraud is not like your existing account being hacked. In this case, the fraudsters take up your personal details to start a fresh new account and not take over those that the victim already has set up themselves.
In this situation, the victims may be absolutely unaware that an imposter has taken their details for application fraud.
How Can You Stop Your Information from Being Used?
Having a simple anti-fraud program can stop your information from falling into the wrong hands. This solution is more of an investment made by financial firms to standardize their identity theft process.
There should be an extensive solution to provide automatic fraud detection; further details investigation, and incident management made for banks as well as lending firms.
The anti-fraud program should be enough to address and resolve multiple cases, such as verifications and real-time checking of the backgrounds of many people at once. This is a necessity for due diligence on the loan application stage via artificially built intelligence and automated learning techniques to detect frauds.
How To Protect Yourself?
Always keep your information private; make sure not to share your sensitive documents. Keep them in a secure place where they are safeguarded. If you no longer need a document, you should shred it and get rid of it. Keep track of your credit score and loans via emails.