opinion
Jane Crossley tells marketers How To Buy Fraud Pre-screening.
Fraud continues to be a massive issue, especially in the financial services sector but for all transactions which involve granting credit. The opportunity for marketers is to make friends with their credit and fraud counterparts! By using the methods available to pre-screen mailing campaigns you can reduce the risk of fraud occurring, specifically by identifying likely fraud 'hot-spots' and changing the way these prospects are targeted. Not only will you make friends but you'll also make your mailing campaigns more efficient and effective in the process.
1. Screen against deceased files
A key starting point for mailing campaigns is to reduce the impact of 'deceased fraud' - a form of identity theft, where the fraudster takes on the identity of the deceased. It is a rapidly growing practice, so removing the names and addresses of deceased consumers before embarking on a mailing will immediately help to stave off this particular threat. With the quality of deceased files on offer in the market, this is an achievable practice for every campaign.
2. Identify different levels of fraud
The process of pre-screening against fraud relies on calculating the likelihood of fraud in a particular area, and therefore there's no defined 'good or bad' split between areas. Instead postcodes can be graded according to the level of risk, and the decision to include them or not made on a more objective level. For example, 'high' risk areas may be screened from a campaign, but 'medium' risk areas may be included, but targeted in a different way (see point 4).
3. Screen out postcodes with a very high fraud rate
After identifying which postcodes have an extreme propensity for fraud they can be removed from a mailing list. Not only does this reduce the risk of fraud cases developing, but it also saves on the mailing budget. The cost of checking and potentially declining applicants who are more likely to be fraudulent will also be reduced.
4. Use different application forms, depending on the postcode
You may choose to include some higher risk postcodes in the mailing in order to maintain volume. In this case, it may be wise to change the level of information required on an application form, depending on the level of risk. For high risk areas, more detailed information can be requested; whilst lower risk areas can be sent a more straightforward form. Not only will this help to deter likely fraudsters, but it also delivers more information on higher risk applicants, which can be verified before the application is progressed any further.
5. Identify potential fraud at the point of application
Once a consumer has filled in their application form, cross checking the information they have provided against existing records can again help to identify likely cases of fraud. If doubt arises because of inconsistencies in the information submitted, either further checks can be made to verify the data, or the application can be rejected.
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