In New Account fraud, a fake customer scams the service provider using poorly designed validation processes. Then, when personal details are stolen, fraudsters can use them to open up a new account and start completely new accounts for a digital service. Fake accounts are usually opened with banks or credit card companies to easily access funds using the victim’s details or other digital services such as a mobile phone contract.
New Account Fraud lets fraudsters perpetrate other attacks, such as:
- Application Fraud: a fraudster applies for new bank accounts or similar financial services with fake credentials. Then the fraudulent account is used to commit illicit transactions.
- Money Muling: a fraudster opens a new account to use it as a mule and move illicit funds. Mule accounts are often related to money laundering.
- Card Testing Fraud: a fraudster creates new accounts, usually on an e-commerce platform, to verify if stolen credit cards have expired or been blocked.