ValidiFI: Cross-Referencing Identity Elements Helps Spot Fraud Risk

Consumers who initially appear low risk based on basic bank account validation may be revealed to be fraudsters when analyzed with additional signals and insights, ValidiFI found in a report released Thursday (Dec. 19).

A comprehensive cross-referencing of phone, email, address and other identity elements against bank account data can spot fraud patterns missed by traditional verification processes, the provider of predictive bank account and payment intelligence said in a Thursday press release.

“At first glance, consumers may pass standard account validation checks with no apparent signs of fraud,” ValidiFI CEO John Gordon said in the release. “However, by assessing the connections between the bank account, consumer identity elements and past payment performance, organizations can uncover critical risk indicators, revealing the truth behind an account’s risk profile.”

For example, ValidiFI’s analysis found that consumers with three or more Social Security numbers (SSNs) tied to the same account in the previous 90 days are a 60% higher fraud risk; consumers with three or more email addresses linked to the same SSN in the previous 30 days are a two times higher fraud risk; consumers with three or more phone numbers associated with the same SSN in the previous 30 days are a 2.25 times higher fraud risk; and consumers with mismatched phone numbers and ZIP codes are a 2.3 times higher fraud risk.

“These findings underscore why organizations need to move beyond standard account validation to implement a more comprehensive, multilayered approach to fraud detection,” Gordon said in the release.

Fraud-related uncertainty is rising among heads of payment, according to the PYMNTS Intelligence report “Fraud Risk Management Pushes Innovation Delays as Uncertainty Rises.”

The report found that 27% of heads of payment reported direct losses from fraud exceeding $500,000 in the previous year. Among those in high-uncertainty environments, 85% reported similar losses.

When DigiFi said Dec. 4 that it was adding ValidiFI’s credit risk solutions to its automated digital lending platform, DigiFi CEO and co-founder Joshua Jersey said: “With this addition, our clients will gain access to credit risk solutions that provide a comprehensive view of creditworthiness, enabling more predictive, automated decisions.”

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