FICO and Equifax convened a meeting with card and banking industry fraud experts on 23rd February to talk about new approaches needed to the mounting threats presented by, particularly, first-party fraud across the credit lifecycle and third party fraud at applications stage.

Many banks are beginning to realize that their bad debt book is littered with individuals who set out to acquire credit facilities with the specific intent not to pay them back. This first-party fraud is distinguished from traditional third-party fraud by the fact that there is no consumer victim — the fraudster is either precisely who they claim to be, or uses a fictitious identity. In either event, such accounts need very different treatment to established credit and collection techniques if the bank is to avoid losses.

Aged, abandoned accounts — where they are attributable to a true identity that performed first-party fraud — may contain important information about customers who may “resurrect” themselves a few years later.  To read the full story click on the link below.

Source:  FICO Banking Analytics Blog