Luckily, the technology exists to help identify and stop account opening fraud before it happens. A simple credit check is no longer sufficient. The critical component is ensuring identity legitimacy during the application process. It may seem like criminals have the advantage but do not worry, there are many ways to combat account opening fraud. What can institutions do to fight this type of fraud?
Once they have established a good relationship, they will gradually start engaging in suspicious transactions. Therefore, they will use their accounts legitimately until they believe the bank is no longer monitoring them. Fraudsters know that financial institutions monitor new account activity for a period and perform ongoing due diligence as part of their Know Your Customer (KYC) policy.
