Third-party fraud occurs when a criminal uses stolen or fabricated identity information to impersonate a real person during a transaction or application. Unlike first-party fraud, third-party fraud victimizes an innocent person whose identity has been compromised. Fraudsters may use the victim's identity to open accounts, apply for loans, or make unauthorized purchases.
Use case/ examples for third-party fraud
Identity theft prevention: Detecting the use of stolen identity information by someone other than the legitimate owner through the use of biometric verification, device fingerprinting, and behavioral analytics.
Application fraud detection: Identifying fraudulent account or loan applications that have been submitted using compromised identity data by analyzing document authenticity, utilizing liveness detection for facial biometrics, and flagging applications that show suspicious patterns.
KYC enhancement: Strengthening Know Your Customer processes to catch more third-party fraud by requiring real-time biometric verification with liveness detection that confirms the applicant is live, present, and is the actual person in the identity documents presented.
