Preventing Identity Fraud: 5 Tips for Businesses

Identity fraud is a type of crime where someone wrongfully obtains and uses another person's personal data in a way that involves deception or other illegal acts to gain some financial benefit. It is a major problem that can happen when credit card numbers, email, Social Security numbers, and bank account details (or other personal information) are stolen and used without the owner's knowledge.

Identity theft fraud is a growing concern for businesses today, as the rise of digital transactions and remote work have made it easier for criminals to steal personal and financial information. Online organizations are particularly vulnerable to identity fraud, as they often handle sensitive data and large transactions with other businesses. Preventing this type of fraud is crucial for businesses to maintain their reputation, customer trust, and financial stability. Sounds easy enough, but how?

Here are 5 simple ways organizations can combat identity theft fraud:

1. strengthening authentication measures
2. training employees on security best practices
3. monitoring for suspicious activities
4. regularly updating software and systems
5. partnering with trusted vendors and service providers

Online businesses cannot afford to ignore the ongoing threat of identity theft fraud in today's digital age. And the good news is, there are tips and strategies businesses can rely on to ensure they do not fall victim or lose the trust of their stakeholders.

ATOs vs. identity fraud

When it comes to ATOs vs. identity fraud on the internet, there are a few things to remember. Despite falling under the category of Cybercrime-as-a-Service (CaaS), ATOs and identity theft are distinct in their nature and impacts. While both of these cybercrimes may appear similar, businesses should understand their subtle differences—to safeguard their assets and reputation from these growing threats. As ATO and identity theft continue to cost businesses millions every month, mitigating their impact has never been more critical.

Account Takeovers and identity theft are two distinct forms of cybercrime with different objectives. ATO is characterized by the unauthorized access to a victim's financial account, while identity theft involves the use of stolen personal information to assume the victim's identity for fraudulent activities. An ATO perpetrator or online thief takes control of an existing account, while identity theft involves opening a new account or line of credit in the victim's name. Both of these cybercrimes can inflict significant financial and reputational harm to businesses, highlighting the need for robust measures to prevent and mitigate their impact.

1. Strengthen authorization measures

This type of fraud is one of the most common types of cybercrime, costing businesses and individuals billions of dollars every year. One of the most effective ways to fight against identity fraud is by strengthening authorization measures. This process verifies an individual's identity before allowing them access to a system or account.

By implementing multi-factor authentication, such as requiring a password and biometric verification, businesses can ensure that only authorized personnel have access to sensitive data. Strong authorization measures not only help prevent unauthorized access to systems but also detect suspicious activities early on, making it easier to mitigate the impact of an identity fraud attack.

The use of weak passwords is one of the primary reasons why cybercriminals succeed in carrying out identity fraud attacks. By using sophisticated techniques like phishing and social engineering, criminals can obtain sensitive information that enable them to take over accounts and steal data. To fight against identity fraud, businesses need to implement strong policies and require users to create complex passwords.

2. Train employees on security best practices

The majority of identity fraud attacks are caused by human error, making it essential for businesses to train their employees on security best practices. By educating employees on how to identify and prevent security threats, businesses can reduce the risk of identity fraud attacks caused by human error. Employees need to be aware of the risks of phishing, social engineering, and other tactics used by cybercriminals to obtain sensitive information.

Employees are the first line of defense against identity fraud attacks. However, it is not enough to just provide training; businesses need to create a security culture that encourages employees to be vigilant and proactive in identifying and reporting security threats. Creating a security culture with clear digital hygiene involves providing employees with the necessary resources and tools to protect themselves and the business. This effort can include implementing a security incident reporting system, establishing a security awareness program, and rewarding employees who identify and report security incidents.

3. Monitor for suspicious activities

Identity fraud is a major concern for businesses of all sizes, as it can result in significant financial and reputational damage. To protect themselves and their customers from this threat, businesses need to monitor for suspicious activities. This effort involves monitoring their systems, accounts, and devices for any signs of unauthorized access, unusual activity, or data breaches.

Businesses can implement a range of monitoring solutions to fight identity fraud. These include intrusion detection systems, endpoint security solutions, and security information and event management (SIEM) tools. Intrusion detection systems detect and alert on suspicious network activity, while endpoint security solutions provide protection against malware and other threats. SIEM tools provide real-time monitoring and analysis of security events across the business, helping to detect and respond to potential threats quickly.

4. Regularly update software and systems

Regularly updating software and systems is a critical aspect of fighting this type of fraud. Cybercriminals are constantly developing new methods to exploit vulnerabilities in software and systems, which is why regular updates and patches are needed to close security loopholes and address vulnerabilities. This move reduces the risk of unauthorized access, data breaches, and this type of fraud.

Establishing a regular schedule for updating software and systems to fight fraud effectively is key. This effort includes not only operating systems and applications but also firmware, drivers, and other critical components. Patch management solutions can automate the update process, making it easier for businesses to stay up-to-date and secure. Regular updates should also include security software, such as antivirus and firewall solutions, to ensure that they are providing the best possible protection against attacks.

5. Partner with trusted service providers

Partnering with trusted vendors and service providers, like Arkose Labs, is an essential step in fighting fraud. Businesses that work with third-party vendors or service providers need to ensure that these partners are following security best practices and are taking appropriate steps to protect against identity fraud. This includes conducting thorough background checks, implementing strong authentication measures, and regularly monitoring for suspicious activities.

Falling prey to identity fraud

One of the first thing victims of identity theft should do is place a security freeze on their credit report. Then jump on the internet and notify law enforcement! Let credit card companies know what has happened. The breach should be reported to the credit bureaus and other organizations like the Federal Trade Commission's Identity Theft Hotline. The Internal Revenue Service (IRS) is the federal agency responsible for administering tax laws, and they offer a service called Identity Theft Central where identity theft can be reported and help found to resolve the case.

Also, personal login information such as login credentials and pins for all accounts should be changed. Checking a credit report regularly is also a good way to spot fraudulent activity early on. It's possible to place a fraud alert on credit reports with Equifax, Experian, Innovis, Transunion, and the National Consumer Telecommunications and Utilities Exchange for free. In addition, creditors may not turn over debts related to identity theft to debt collectors.

There are several types of identity theft, but tax ID theft is one of the most common. This occurs when someone uses a Social Security number to file a false tax return with the IRS or the state of residence. This problem can be combated by going to your local police with a copy of your FTC identity theft report, government-issued ID, and proof of address. The IRS also recommends that businesses take steps to prevent identity theft, such as not initiating contact with taxpayers via email or social media channels.

A fraud alert is free. It will make it harder for someone to open new accounts in your name. An identity theft report can be used as a police report if you have been a victim of identity theft. This report is necessary to prove that you are not the one who has committed the crime and to help with further investigation.

Arkose Labs wins the fight against identity fraud

Arkose Labs' security platform utilizes real-time fraud intelligence and secondary screening to provide businesses with reliable solutions to address ambiguity. The platform's real-time risk assessments classify traffic based on probable intent, informing the system if additional authentication is necessary. Rather than blocking traffic outright, targeted friction is used only for high-risk traffic to ensure that the majority of good users can pass unchallenged.

The custom enforcement challenges of Arkose MatchKey are context-based and adaptive visual challenges designed to halt both automated and human-driven account takeover attempts. These challenges are engineered to defeat machine vision software, causing bots and automated solvers to fail. With the increasing complexity of challenges, the platform saps human fraudsters' resources, wearing them down and compelling them to abandon attacks.

Don't leave your business vulnerable to cyberattack. Reach out to us today to book a demo and see how Arkose Labs can help protect your business from fraud and online abuse

*Identity theft is a federal crime! The Federal Trade Commission (FTC) is the primary federal agency that handles consumer complaints related to identity theft. You can report identity theft to the FTC online at IdentityTheft.gov or by phone at 1-877-438-4338.

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