New account fraud when criminals create fraudulent accounts with the intent to access goods and services under false pretenses. These accounts are used to commit crimes such as identity theft, money laundering, and other types of criminal activity. New account fraudsters are constantly adapting their techniques to gain a competitive advantage and a greater chance of committing successful fraud.

Criminals use falsified identity documents to open a new account with financial institutions under the victim’s name. Criminals then exploit the benefits of the new account for their own gain. These can include taking advantage of promotional items for new customers such as free products, applying for credit cards and loans with stolen identities, obtaining medical services or prescription drugs with stolen ID, and more.

The Rise of Account Origination Fraud: How to Protect Your Business and Customers

One of the most difficult forms of fraud to detect is new account fraud, and it often goes undetected for a long time. For example, it took 151 days for authorities to catch a 30-year-old Canadian man who opened over 600 fake bank accounts and racked up $5 million in fraudulent charges.

The key to preventing new account fraud is an intelligent, comprehensive risk assessment and verification process during the onboarding phase. This is where biometric verification can help. iProov’s technology ensures that the person authenticating with the system is the right person and not a fake identity being used for new account fraud. This is achieved by requiring a selfie with a digital camera and then analyzing a variety of indicators including passive liveness detection to make sure that the person is actually present.