Application Fraud
Overview
Application fraud occurs when individuals submit false or manipulated information to obtain accounts, credit, or benefits. Tactics include synthetic identities, altered documents, income inflation, straw applicants, and mule recruitment. Controls combine document authentication, selfie and liveness checks, database corroboration, device and IP intelligence, and graph analytics to link related applications. Rules and machine learning models evaluate inconsistencies, velocity, and shared signals.Clear exception playbooks and manual review focus on high materiality discrepancies. Post decision feedback loops label outcomes to retrain models and refine thresholds. Programs must balance friction by stepping up only when risk warrants it and by offering guided recapture for low quality submissions. Strong application fraud controls reduce charge offs, prevent downstream ATO and mule activity, and improve overall onboarding quality.
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