Channel separation techniques 

Clever fraudsters never use the same name, address, date of birth or identity number on records. Instead they will mix personal information and data depending on what channel they want their character to play, in the aim to deceive. Should insiders also be assisting an external fraudster, it would then become almost impossible to detect a fraud without artificial intelligence and machine learning technology.

What is a separation technique?

The illustrations below help to understand the technique in the context of fraud and data:

Proof of address

Bobby Leon
1515 Alpha lane
leon1townsen@email.com
27826014332

Supplier application

Bobby Leon Town
9901017689012
L.Towsen@work.com
826014332
1515 Alpha lane

Known Fraudster

Larry Twosen
AKA Bobby Town
123 Main Street
DOB: 01/01/1999
826014223

Company and intellectual property commission
(Business registration)

L. Towsen
9901017689012
1515 Alpha lane
L.Towsen@work.com

Credit Bureau

Lean B. Towsen
123 Main Street
9901016789012
towsenl@email.com
270826104223

The objective of the fraudster is to use some or a part of, their real identity and personal identifiable data to appear credible.  If we use the supplier application above, let’s assess which channels he used to get past the onboarding protocols.

Matching information:

  • Name
  • Proof of address
  • Credit Bureau
  • Surname
  • Business registration
  • Credit Bureau
  • Identity number
  • Business registration
  • Email address
  • Business registration
  • Contact number
  • Proof of address
  • Physical address
  • Proof of address
  • Business registration

The above example combined all the plausible sources, and avoided the known fraudster information to bypass the process, and would almost certainly be onboarded as a supplier in an organization where manual verification was done.

What is an insider threat?

  • Insider threats come from employees in positions, or with mandates, to onboard suppliers or new clients (especially where credit is approved).
  • There would be a logical relationship, for example, a shared contact number, physical address or email address between the employee and the applicant on a credit or new supplier application.
  • The processes or protocols implemented by the organisation are overridden on purpose by the employee, to allow the fraudster access to credit or supplying goods or services.
  • Normally a family or friend connection exist between the two parties.

In the next blog we will discuss how to connect the dots between the channel separation and the assistance of an insider.

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    Written by Leon Towsen, COO, XTND

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