How new account fraud works
- Stolen identity: a real person's data and documents, used without their knowledge
- Synthetic identity: real and invented details combined into a person who does not exist
- Forged or altered documents, and manipulated or generated selfies
- Money mules: genuine customers who open accounts and hand them over
- Bonus abuse: many accounts opened to collect sign-up or referral rewards
Once open, the account receives the proceeds of scams and passes them on, is used to test stolen cards through top-ups, or builds up credit and an overdraft before disappearing, which is called a bust-out.
How providers detect new account fraud
Identity verification checks the document and matches the face to it, with a liveness test against photos and replays. On its own that is not enough, because a mule passes it honestly.
The other signals come from around the application: many sign-ups from one device, address or network, an email address or phone number created days ago, and data that does not fit together. Limits that start low and rise with history contain what gets through.
Why new account fraud matters at launch
A new product is tested by fraudsters as soon as it opens, most of all when it pays a sign-up bonus or issues a card at once. An account opened under a false identity is also a failure of customer due diligence, so the loss is followed by a compliance finding.
Where New account fraud shows up in a platform
Modules that do the work
- KYC / AMLIdentity checks, screening and ongoing monitoring, with the verification provider you choose.
- Fraud & riskReal-time fraud scoring, limits and case management, with the risk engines you already trust.
- AuthenticationSign-in, passkeys and second factors for customers and staff, on your identity provider or ours.
- Rewards & referralsRefer-a-friend, affiliate partners, cashback and loyalty points, earned on what your ledger can prove.