Recently, the Federal Trade Commission (FTC) hosted Tax Identity Theft Awareness Week with a series of events to help educate consumers and businesses about ways to minimize risk. If you’re not aware, tax identity theft occurs when a fraudulent tax return is filed using someone else’s Social Security number and the victim’s refund is stolen. This type of cyber fraud can happen in a mass targeted capacity where thousands of fraudulent returns are swiftly submitted in short succession.
In fact, just last year I wrote about a case in which the IRS prevented an automated attack on electronic filing. But preventing fraud doesn’t deter fraudsters – it inspires them! In response, we have to remain agile, and gain a broader, deeper view of consumer identity and suspected fraud.
Combatting identity theft tax fraud requires integrated layers of authentication. However, to truly understand the solution, we have to first fully comprehend the responsibility of the government to prevent identities from being stolen. As consumers, we all know that our credit can be compromised and returns or benefits lost – never to be seen again. But what can the government do to prevent citizens’ identities from being taken? This isn’t a job for movie star Liam Neeson.
The problem extends beyond agencies such as the IRS; identity theft fraud is an issue for government at all levels—local, state or federal. Cyber criminals are continuously evolving their attack methods to impersonate real people and create synthetic identities to commit fraud. By using real identities or some real information, fraudsters make traditional IT security systems, such as firewalls and malware detection, largely irrelevant.
Taking a step back, government agencies are not cyber criminals’ only targets; about $15 billion was stolen from 13.1 million consumers in 2015, according to the 2016 Identity Fraud Study published by Javelin Strategy and Research.
“Identity fraud is a serious issue, as fraudsters have stolen $112 billion in the past six years. That equals $35,600 stolen per minute, or enough to pay for four years of college in just four minutes,” noted the report’s overview.
Although the numbers across industries are daunting, greater certainty can be achieved through comprehensive and unique data sets—whether credit, criminal, public or non-credit data. The combination of public and proprietary data sources can enable greater defense against identity theft tax fraud, using information for good to protect the government, businesses and consumers alike.
Both government agencies and businesses can now better link, interpret and discover anomalies and patterns of risk by arming themselves with robust data assets, advanced analytics and leading technology.
Recently, TransUnion launched IDVision, a suite of solutions offering a holistic approach to fraud and identity management for businesses and government organizations. One of the solutions in the IDVision suite is Digital Verification and Authentication, which ensures consumers are who they say they are by examining hundreds of digital signals captured during an online or mobile transaction. Having this type of verification and authentication can help give agencies greater confidence about the many users accessing their systems.
To better understand the impact of stolen identities and obtain an in-depth analysis on the newest technology and best defense strategies against cyber fraud, download our Insight and Solutions Guides on Cyber Fraud.
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