Fraudsters are always looking for new ways to drive revenue and evade the scrutiny of risk teams. This cat-and-mouse game has seen the bad guys continually adapt their tools and techniques to stay one step ahead of those out to stop them. Despite headline card fraud losses in the US declining from $8.1 billion in 2017 to $6.4 billion last year, victims are actually shelling out more per head as the scammers focus on high-impact attacks like account takeover and account creation fraud, according to Javelin Strategy & Research. ¹ 

The approaching back–to–school period represents a major opportunity for such fraud campaigns. Financial services firms and e-commerce players should be prepared for the surge, and look to adaptive decisioning platforms to stem the tide. 

Faking it 

Whether you’re in high school or higher education, back–to–school can be a stressful time for students and parents alike. True to form, fraudsters have spotted multiple opportunities to exploit this turbulent period and trick consumers out of their hard-earned cash. They try a variety of tactics: everything from impersonating IRS officers and demanding a ‘federal student tax’ to offering phony financial aid services in return for a fee. There’s even a roaring trade in fake high school diplomas. 

Back–to–school can also be a potentially stressful time for businesses. Why? Because fraudsters are also adept at impersonating students from the e-commerce stores they may be buying essential items from to the financial services firms they’re looking to secure loans from. 

E-commerce scams: Fraudsters typically take advantage of high-volume sales periods like the back-to-school months of late summer to validate and use stolen credentials to hijack existing accounts. Their hope is that retailers will be too busy focusing on accepting sales to spot signs of fraud. They’re helped in these efforts by large volumes of breached identity data readily available on the dark web and automated bot-powered tools which can try large numbers of stolen credentials simultaneously across multiple sites. These account takeover attacks can be difficult for some firms to spot as a transaction may appear as if approved by a genuine customer. 

Loan scams: In this scenario, scammers impersonate students to take out new loans from providers, running up huge debts with a number of financial services firms before “busting out.” In some cases, they may rely on synthetic identities stitched together from real, stolen personal information and fake details. It’s a lower risk, low effort approach often likely to garner higher payouts for the scammer. It remains difficult to detect synthetic fraud as these are technically new identities being used to evade traditional filters. 

Taking the fight to the fraudsters 

The answer is to upgrade your fraud tools to a data-centric, end-to-end platform like Simility’s. Our Adaptive Decisioning Platform offers a unique approach to provide a 360-degree view of each user, enabling firms to stop account takeovers and new account fraud in their tracks – even attacks using synthetic identities. The key to its success is a layered approach that combines a huge variety of in-house and third-party data – from blacklists, digital intelligence, credit reporting agencies and more – with automated link analysis and advanced machine learning. 

The result is technology that empowers fraud teams to make smarter decisions, powered by AI tools capable of detecting patterns the human eye might miss, while adapting over time as fraud techniques change. That’s innovation to protect the bottom line and brand, minimizing customer friction and maximizing business opportunities during busy periods like back–to–school. 

To learn more about how Simility’s Adaptive Decisioning Platform can help protect businesses from fraud during busy periods like back-to-school, schedule a demo today. 

1 Javelin Strategy & Research, https://www.globenewswire.com/news-release/2019/03/06/1748662/0/en/Consumers-Increasingly-Shoulder-Burden-of-Sophisticated-Fraud-Schemes-According-to-2019-Javelin-Strategy-Research-Study.html