With the advent of innovative technology, application fraud has been evolving over time. What was once a relatively straightforward area, where data breaches could be quickly managed, is now becoming much more complex and unpredictable.
Scammers are using increasingly sophisticated methods to carry out their attacks on weak systems, and more robust strategies are now required to stay ahead of the game.
Application fraud involves the use of false or stolen information to apply for something, like a loan, credit card, insurance, or even a job. The goal of this fraud is to trick the other party into approving the application and providing specific services or finances that the fraudster should not be getting.
This article will help you understand application fraud and how you can take steps to prevent it.
Application Fraud and Its Various Types
Application fraud happens when a person tries to deceive an organization into granting benefits or services using made-up or stolen personal details for the application. These benefits likely wouldn’t have been given if the person’s real information was used. There are various forms of this fraud:
- Identity Theft: Scammers steal personal information, such as social security numbers and bank account details, to apply for loans, credit cards, and government benefits under someone else’s name.
- Account Takeover Attack: The scammer gets unauthorized access to an existing account using the user’s credentials and applies for services using that account.
- Employment Fraud: The person provides false information on job applications, like fake credentials, employment history, or references.
- Government Benefits Scam: Scammers apply for unemployment insurance, disability benefits, or social services using false information or stolen identities.
How to Prevent Application Fraud
Here are some ways you can prevent application fraud:
1. Implement Better Data Handling Measures
Implementing strict data security measures is essential for protecting personal and financial information from unwarranted access. This might involve encryption to keep sensitive data safe in storage and while it’s being sent. If the scammer doesn’t have the key, they’re going to have a hard time finding that information.
You also need to regularly back up your data. Establish a solid recovery plan if it gets breached, and make sure to audit it regularly to fix any vulnerabilities that might occur down the line. Being prepared will help you act swiftly in the worst-case scenario.
2. Establish Biometric Verification
Using unique physical characteristics like fingerprints, facial recognition, or iris scans can provide an added layer of protection beyond traditional passwords and PINs. These are difficult for scammers to replicate, making it easier to secure all data and prevent application fraud. You can also combine this with other modes of authentication, such as sending OTPs to a particular physical device.
3. Increase Awareness About This Fraud
Raising awareness among both employees and customers can be quite beneficial as well. Employees need proper training to recognize and handle suspicious applications. They need to be updated on the latest trends in application fraud so that they respond promptly and accurately, reducing the risk of financial loss and security breaches.
Customers also need to know how to protect their personal information and recognize the warning signs of such scams. We recommend creating strong and secure passwords, verifying the identities of every organization or person requesting confidential details, and reporting any dubious activity that occurs.
4. Make Use of Free People Search Sites
Using free people search sites can help verify the identities of every person or group involved in a specific transaction or application. All you need to do is enter the respective name along with additional information you might have, such as email address or phone number.
These websites will pull up data on the person, such as contact details, address history, and even social media profiles. You’ll quickly be able to cross-reference this data with the information given in the applications to make sure that the person really is who they’re claiming to be. As beneficial as such tools are, use them responsibly and in accordance with privacy laws and regulations.
Preventing Application Fraud Starts With Just One Step
It can be overwhelming trying to tackle application fraud from all these different angles. However, it all begins with one important step: developing the proper mindset. Be proactive instead of reactive so that you can identify and prevent fraud before it even occurs. Staying informed will help you stay ahead of the game and protect your financial well-being at all times.
