WebsiteGear Logo Log In
New User? Sign Up
About | Contact | FAQ
  Home News Website Related Website Revenue Wednesday, August 21, 2019 
Add Press Release News | News Feeds Feeds | Email This News Email

New, Rapidly Growing Fraud Technique Costing U.S. Businesses $50 Billion Per Year
Wednesday, July 17, 2019

Synthetic identity fraud is responsible for 20 percent of credit losses, with an average charge of $15,000. Loss prevention specialist Chargebacks911 warns that effective countermeasures will likely frustrate consumers by slowing transaction times.

TAMPA BAY, Fla., July 17, 2019 /PRNewswire-PRWeb/ -- Synthetic identity fraud (SIF) is one of the fastest-growing and most sophisticated forms of fraud in the United States today. The Federal Trade Commission estimates that SIF, which is difficult to detect and even harder to stop, currently costs American businesses $50 billion per year[1]. Chargebacks911, a leading dispute mitigation and loss prevention firm, notes that consumer-driven pressure to speed up e-commerce transaction times has opened the door to fraudsters who have the technological ability to create false identification and credit histories.

When U.S. businesses adopted chipcards as the standard for credit and debit cards in 2015, criminals were forced to channel their fraud efforts online, according to banking experts. That migration, along with large-scale data breaches, loosening credit standards and the exploitation of legacy credit creation practices and systems, laid the groundwork for fraud to flourish. particularly SIF. Today, SIF is responsible for an estimated 20 percent of credit losses, with an average charge of $15,000[1].

Unlike traditional identity theft, in which a criminal obtains valid personal information to open fraudulent accounts in the victim's name, SIF involves the creation of a fictional identity based on a stolen but inactive Social Security number (SSN). The SSNs of children, who tend to have no credit history, are particularly prized. Using the valid SSN and invented information, the fraudster applies for multiple credit cards, pays the bills punctually and gradually establishes a favorable credit rating. This process can take several years. Once a significant amount of credit is established, the fraudster stages a "bust out" shopping spree and causes the fictitious identity to vanish[2].

The U.S. Federal Reserve recently created a workgroup consisting of Fed officials and payment industry leaders to find ways to reduce SIF payment fraud. The Fed has identified SIF as a major payment security initiative for 2019, citing large-scale data breaches that put personal information at risk, as well as the shift to remote payment channels and gaps in fraud detection[3].

"It's gratifying to see this level of attention being paid to the problem," said Monica Eaton-Cardone, co-founder and chief operating officer (COO) of Chargebacks911. "People throughout the payments industry have been asking themselves what can be done to thwart SIF fraud. One card network, Mastercard, is interested in adding an authentication mechanism for online purchases and data scientists are using machine-learning to identify red flags based on a customer's transaction patterns. Each of these efforts takes time and could potentially slow the transaction cycle. While this might encounter some consumer resistance, in the long run it will help consumers and merchants--who are often held liable for the false ID."

SIF detection and prevention are needed to stop the financial hemorrhaging. Companies like Chargebacks911 contribute to the solution by helping e-commerce merchants defeat fraud, boost revenue and shrink chargebacks. A thought leader in the finance world, Eaton-Cardone and her team will attend a number of upcoming industry events, including the MWAA 17th Annual Conference in Chicago, Affiliate Summit East 2019 in New York and the IATA World Financial Symposium in Miami.

About Chargebacks911/The Chargebacks Company
Chargebacks911 empowers businesses to combat constantly evolving fraud tactics and mounting customer disputes that directly threaten profitability. Operating as The Chargeback Company in Europe, Chargebacks911 has pioneered effective, industry-leading solutions designed to reduce chargeback fraud, alleviate processing costs, mitigate risk and recover revenues.

The company's unparalleled expertise and proprietary technology have earned three consecutive CNP Customer Choice Awards for Best Chargeback Management Solution, three successive AI Lions' Den Awards for Best Airline Industry Solution, and Gold and Silver Stevie Awards from the American Business Awards (ABA). With innovative and highly scalable services ranging from Intelligence Source Detection(TM) (ISD) to Tactical Representment, Chargebacks911 uncovers the true source of chargebacks, battles unjustified disputes, rescues lost revenue, safeguards reputations, and defends against relentless, ever-changing cyberthreats. For details on Chargebacks911's comprehensive risk management solutions, informative articles and other merchant resources, visit

1. Luttrell, Christina, "The Fastest Growing Form of Fraud That's also Hardest to Detect: Synthetic Identity Fraud," Global Banking & Finance Review, March 4, 2019.
2. Kratovil, Jason, "Fraudsters turn to synthetic identity theft," Credit Union National Association, October 17, 2018.
3. "The Federal Reserve Looks to Further Define Fraud," PaymentsJournal, June 13, 2019.

SOURCE Chargebacks911

Email This News Email | Submit To Slashdot Slashdot | Submit To Digg | Submit To | News Feeds Feeds

Nav Latin America and the Caribbean Credit Cards Market Report 2019-2023 | Aug 21, 2019
Nav Deji Sasegbon Resurrects With New Publication | Aug 21, 2019
Nav Columbus Attorneys at Grossman Law Offices Named Among The Best Lawyers in America¬© | Aug 21, 2019
Nav IntSights Exposes Top Dark Web Marketplace Selling Digital Browser Identities as the Latest Hot Commodity | Aug 21, 2019
Nav International Hemp Solutions Appoints eCommerce and Marketplaces Executive Jessica Lesesky as President of Operations for ehemp | Aug 21, 2019
Nav Lists Dai (DAI) | Aug 20, 2019
Nav U.S. Airlines Elevate Co-Branded Credit Cards to New Heights, reports Packaged Facts | Aug 20, 2019
Nav The San Diego Union-Tribune's Third Annual Festival of Books | Aug 20, 2019
Nav Nav Ranks No. 39 on Fast 50 List of Utah's Fastest-Growing Companies | Aug 20, 2019
Nav PressReader acquires News360 | Aug 20, 2019

Submit News | View More News View More News