What's the ideal solution?
Defining the perfect solution is subjective when it comes to security, as it depends upon the specific environment to be secured. A "perfect" system for security in a nuclear power plant may be extreme overkill when applied to airline passengers. However, for identity fraud prevention during face-to-face transactions, such as retail payment, the following tips can help significantly in making the right decision:
1. Are you verifying the paper, or the person?
In most retail environments, the traditional approach to fraud prevention involves verifying cheque or credit card accounts. Look for a solution that moves a step further, verifying the PERSON not the PAPER. Identity verification is the key, as most identity thieves steal or create false financial instruments that pass inspection of the paper. Ensure the PERSON is authorised to use the account.
2. Ensure the system benefits your customers.
The decision to purchase a fraud-prevention system is usually made to protect your business (reduce financial losses, prevent theft of confidential information, restrict physical access to specific areas, etc.). Therefore it must show proven results for ROI, employees ease of use, and overall effectiveness in stopping theft. Even more important is maintaining customer trust. Customers need to accept the value of sharing a portion of their identity in exchange for additional protection of their identity. Ensure your solution is non-intrusive and accurate in collecting required data. The consumer-friendly aspect of your initiative is key to success.
3. Choose a system that cannot be easily bypassed by criminals.
Biometric systems all rely on identifying features possessed by all consumers, whether honest or fraudster. But the solution's ability to accurately read 100 percent of the population varies dramatically, as does their vulnerability to someone intentionally avoiding being "read" by the system. Any legitimate "non-read" factor is vulnerable to exploitation by crooks, and will alienate honest consumers at the same time.
4. Make certain a secure audit trail records all transactions.
A good solution should not only prevent and detect fraud in real-time, but should also record the activity for prosecution of identity thieves. This critical element of fraud prevention ensures your own employees remain honest, and a secure audit trail provides means for prosecution and quick dispute resolution. Loss prevention officers must be armed with proper tools to successfully investigate and/or prosecute identity-related crimes, so evaluate the depth of audit trail records and reporting.
5. Verify that the system respects consumers' privacy.
Privacy does not have to be a trade-off in order to provide solid security. Identity verification systems should collect ONLY data needed for fraud prevention. Customers and users of the system should be informed of the exact use of their information before they're enrolled in the system, and ensured that only data necessary for validating identity is collected. Strict policies should prohibit information from use for any other purpose.
Conclusion
Conventional fraud prevention services rely on the notion that identity thieves can be stopped through the verification of financial instruments or casual, visual comparison of signature or photo identification. These systems, which are used to verify cheque, debit and credit card transactions, to approve car rentals, airport check-in and building access, overlook the fact that personal and financial transaction documents are easily stolen, duplicated or counterfeited.
Most focus on verifying the instrument used for purchase, not the person. The information above, including tips to consider in purchasing identity verification systems, will serve you well in determining the correct system for your needs.
Remember that technology continues to offer new advances in this marketplace. Don't fall prey to the hype of technology that isn't ready for real-world consumer adoption. Test the solutions you explore and ask for statistics regarding their success with customers with needs similar to your own. And finally, train your employees to use the solution you choose. They are the first line of defence in preventing identity fraud. They are also in direct communication with your customers, and should be providing assurance that you value the priceless identities your system is implemented to protect.
Larry Gilbert is president and CEO of Identico Systems.
