The pandemic is receding, life is returning to normal (I recently sat inside a coffee shop in NYC!), and if you're a fraudster focused on application fraud (the topic of this week's Feed) it might be time to quit while you're ahead.

What is application fraud?

Loosely defined, application fraudsters aim to open or use an account for the purpose of dishonestly gaining a benefit. There are three types of application fraud - first-party fraud, mule fraud, and synthetic fraud. This week's webinar covers them in detail.

What happened during the pandemic?

Fraud experts have called the pandemic the "perfect storm" in the battle against fraud and financial crime. Why? The sudden dislocation of workers required governments to pump billions of dollars of stimulus into the global economy and swiftly deliver these funds via online-only services (managed by private institutions) in many cases. As the US begins to ramp up its audit of fraudulent PPP loans, some incredible cases have been revealed: fake orange groves in Minnesota ($2 million dollars!), unregistered farms in the Carolinas, and a man who skimmed over $1 million through his bank in Wisconsin (his response, by the way, was "I guess I was just greedy"), among others. Application fraud has also been a heightened concern for other online services (e-commerce, online betting, and credit cards, among others).

Could it have been stopped?

Governments will bring many more cases in the coming months and years, but our view is that application fraud, even in times of great stress, can be effectively managed by combining some simple verification steps into the application process. For example, Demyst actively partners with organizations to combine data from account service providers, business bureaus, and standard identity data products, to power application forms. The key is to strike a balance between verifying business ownership and financials, while also ensuring the application process is low friction, paperless, and quick. We continue to evangelize this approach and we're encouraged that institutions (public and private), are now investing in the data and infrastructure to more effectively combat application fraud.

Other Recommended Feeds

Demyst's Partnership with AWS Data Exchange (Press Release)
A brief introduction to Demyst’s partnership with the AWS Data Exchange with guest speaker Arif Razvi (Worldwide Leader, AWS Data Exchange).

Tracking business intentions with intent data (Webinar)
Demyst provides a brief overview of key use-cases for B2B intent data, as well as a data landscape.

Applying Demyst Fraud Middleware to Application Fraud (Webinar Invitation)
Join Demyst for a deep dive into application fraud as well as an introduction to Demyst's Fraud Middleware solution.