Fraud Resource Group, a business, insurance and identity fraud investigative and consulting firm, is using StrikeForce Technologies’ products to launch its Trusted Customer program, a Web-based identity validation and authentication service that helps prevent fraudsters from using false identification to set up fraudulent accounts and steal high-value vehicles, goods and rental equipment.
Construction equipment theft is a $1 billion annual problem, according to the National Insurance Crime Bureau, and only 10 percent to 15 percent of stolen equipment is recovered, according to the National Equipment Register. Fraudsters, posing as customers and contractors, use false credentials and stolen credit card data to “rent” vehicles, tools, and construction equipment. The rental stores lose equipment and potential income until a replacement arrives, and the legitimate credit card holder is left to dispute the charge.
“Almost a third of all our equipment theft claims are due to conversion, which means the customer rents equipment but never brings it back. The renters use false or stolen identification, so it does no good to try to track them down,” said Maura Paternoster, risk management coordinator for ARA Insurance Services.
“Rental fraud has become a concern that can’t be ignored. Trusted Customer appears to be a valuable and proactive risk management tool to combat this growing problem,” said Kathy Schwartz, senior vice president and CFO of the American Rental Association.
Another top target for ID thieves is the automobile industry. There are 21,000 authorized dealers in the United States that sell nearly 30 million cars annually. Fraudsters obtain financing while using someone else’s valid name, address and Social Security number, and often re-sell vehicles or their parts.
The new Trusted Customer program combines StrikeForce’s identity validation product, ValidateID (formally known as “VerifyID”), and its strong authentication platform, ProtectID, to continuously help in protecting new and returning customers. The Trusted Customer program validates that new customers are whom they say they are by presenting them with three to five questions that the “right” person will be able to answer, but that fraudsters are unlikely to know. The Trusted Customer program scans over 20 years of historical data encompassing billions of records, such as previous address, vehicle and homeowner information.
When the questions are answered correctly, the individual becomes a Trusted Customer, and is issued a user ID linked to his or her cell phone. Returning Trusted Customers present their user IDs, and the Trusted Customer program calls their cell phones to authenticate transactions. Users simply enter their customized personal identification numbers into cell phone keypads, and they’re approved.
The process only adds a few seconds to each transaction and provides protection to merchants, customers and potential identity theft victims. Additional benefits include better service by increased equipment availability and lower insurance rates due to reduced fraud.
“Identity fraud schemes have become increasingly more sophisticated. Fraudsters have banded together to form efficient and profitable criminal organizations, targeting merchants with high-valued goods that can be easily resold, as well as car dealers and equipment rental stores,” said Jon McDowall, partner with Fraud Resource Group and a fraud investigator for 20 years. “Trusted Customer gives national, regional and small businesses alike the ability to affordably secure their inventory and minimize fraud-related losses.”
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