New Account Fraud

Credit.com covered a survey that had some scary findings: namely that roughly one of out 5 Americans has been a victim of ID theft, and that credit card fraud only comprises about 20% of ID Thefts.

We obviously can't speak to the accuracy of those numbers, but they do seem to go along with what Javelin Research and Strategy has pointed out this year; other types of fraud, specifically new account fraud, are on the rise.

So: What is new account fraud and why, as Javelin points out, is it so hard to detect?

New account fraud happens when a thief opens up a new line of credit in someone else's name. Usually, any correspondence between the credit issuer and the "account holder" goes to a different destination than the actual victim. In other words… the victim doesn't know that they aren't receiving a statement from a bank, because the victim doesn't know there's a relationship with the bank.

One way to prevent this type of fraud from becoming damaging is to regularly check your credit report. It will show you each query performed on your personal credit (after all, in order to open a line of credit, these queries must be performed).

If you see a query that you aren't aware of, that can be a clue that someone might have your personal information. (and if you're a PrivacyGuard member, this means it's time to call us to make sure everything is as it should be).

Posted by Darragh