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© 2016 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian
Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted
work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public.
#vision2016
First party fraud
Sifting through the noise to find and manage true risk
© 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
Introducing:
#vision2016
2
Barbara Simcox Turnkey Risk Solutions
Kyle Hinsz Experian
Christopher Danese Experian
3 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public. #vision2016
FIRST
PARTY
FRAUD
Credit loss or
fraud loss?
4 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016 Barbara Simcox
Turnkey Risk Solutions
5 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016
Emergence of new threats
Bust Out
Credit abuse
Synthetic
identity Third party and first
party schemes have
the ability to be
interchangeable
Third party fraud has evolved
into first party fraud schemes
The
customer
is the victim
Counterfeit
Lost or stolen
Third party fraud
First party fraud
The
business or
institution
is the
victim
Identity theft
6 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016
Scheme was “make up, pump up
and run up”
7,000 fake identities for profit of $200 million
Scheme was simple; advertise on Craigslist to have fictitious identities added to real people’s accounts
Industry trends and impacts
7 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public. #vision2016
We believe it is one of the
biggest [bank frauds] the Department
of Justice has ever uncovered.
“
” — Matthew Reilly
New Jersey
U.S. Attorney’s Office
8 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016
$200 million first party fraud scheme
ALASKA (USA)
CANADA
UNITED STATES AMERICA
MEXICO
GREENLAND(DENMARK)
ICELAND
FARCA ISLANDS UNITED
KINGDOM
FRANCE
VENEZUELA CENTRAL
AFRICAN
REPUBLIC
DEMOCRATIC
REPUBLIC
OF CONGO
ALGERIA
NIGER MALI
CHAD
SUDAN
ERITREA
TUNISIA
MAURITANIA
WESTERN
SAHARA
SENEGAL
GUINEA
LIBERIA
NAMIBIA
ZIMBABWE
ANGOLA
ZAMBIA
BOTSWANA
SOUTH
AFRICA
KENYA
TANZANIA
CONOGO
CABON
CAMEROON
NIGERIA
BURKINA
FASO
COLOMBOA
GUYANA
SURINAME
FRENCHGUIANA
ECUADOR
PERU
BOLIVIA
BRAZIL
PARAGUAY
ARGENTINA CHILE
URUGUAY
BELIZEA
HONDURAS
NICARAGUA
GUATEMALA
SALVADOR
COSTA RLCA
PANAMA
HAITI
DOM.
CUBU
BAHAMAS
G.B.
SIERRA L. LVORY
COAST
TOGO
BENION
LES.
SWA.
MADAGASCAR
MALAWI
BU.
SWI.
GARMANY BEL.
NORWAY
DENMARK
ETHIOPIA
JAM.
MOZAMBIQUE
SOMALIA
LIBYA EGYPT
SAUDI
ARABIA OMAN
FRANCE
IRAQ IRAN
SYRIA
TURKEY
AFGHANISTAN
INDIA
TURKMENISTAN
UZBEKISTAN
KAZAKHSTAN
SRI LANKA
JORDAN
CYP.
GREECE
LTALY
BUL.
BOS.
HUN.
AUS.
SWI. M.
UKRAINE
POLAND
GARMANY
KUWAIT
QATER
M.
HOL.
MOROCCO
PORTUGAL SPAIN
RUSSIA
MONGOLIA
C H I N A
I N D O N E S I A
A U S T R A L I A
BHUTAN
BANGLADESH
MYANMAR
SRI LANKA
N.KOREA
S.KOREA
JAPAN
TAIWAN LOAS
THAILAND
CAMB. VIETNAM
MALAYSIA
BR.
PAPUA
NEW-GUINEA
NEW-ZEALAND
RW.
SWEDEN
EST.
BELARUS LIT.
LAT.
FINLAND
SLO.
S.
A.
ROMANIA
PAKISTAN
INDIA UAE
8
7,000 synthetic identities
25,000 credit cards
169 bank accounts
1,800 mailing addresses
80 fraudulent merchants
Scope AL, AZ, CA, CT, FL, GA, ID, IL,
IN, IA, KS, KY, ME, MD, MI,
MS, MO, NJ, NY, NC, OH, PA,
TX, UT, VT, VA, WA AND WI
28 states United States of America,
Canada, Romania, Pakistan,
India, United Arab Emirates,
China and Japan
8 countries
9 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016
Impacted industries
Financial Services
Consumer and
Business: Auto,
Credit Card,
Mortgages, Merchant
Processors, Retailer,
and Market Place
Lenders
Healthcare
Healthcare
Providers,
Hospitals,
Pharmaceutical
Companies, etc.
Insurance Industry
Auto, Medical,
and Personal
Liability Providers
Government Services
IRS, SSA, GSA,
Medicare/Medicaid,
Fannie Mae, HUD, etc.
10 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016
First party fraud implications
Regulatory Reputational Operational Financial
Compliance violations, fines, sanctions, etc.
Money laundering
Terrorism financing
Increased expense due to redundancy of effort
Significant
fraud or credit
losses
11 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016
What is in the data?
Definition vs. tagging
First party fraud
Individual receives credit with no intent to pay
Defaults on first payment
Never makes any payment
Unable to contact in collections
Misleading application information
First pay default
Multiple accounts go delinquent
Losses exceed credit limit
Returned payments
Credit limit increase requests
Bust out
12 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016
Not all data tells the same story
First
party
fraud
Bureau data
Application information
Identity verification
Identity link analysis
Device intelligence
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Experian Public.
#vision2016
Assessing true risk
0%
80%
0% 10%
Pe
rce
nt
Bad
Percent Good
Bust out score
Credit score
14 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
#vision2016
Synthetic ID life cycle
Detecting through analytic tools
Creation
Use
Bust Out
Device intelligence
Identity element link analysis
Identity verification scores
Know your customer
Identity verification scores
Never pay scores
Bust out scores
Device intelligence
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Experian Public.
#vision2016 Who has the first
question?
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Experian Public.
For additional information,
please contact:
@ExperianVision | #vision2016
Follow us on Twitter:
#vision2016 [email protected]
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Experian Public.
Share your thoughts about Vision 2016!
Please take the time now to give us your feedback about this session. You can complete the survey in the mobile app or request a paper survey.
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18 © 2016 Experian Information Solutions, Inc. All rights reserved.
Experian Public. #vision2016