MeridianLink Marketplace Solutions to Address Modern Fraud 

The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding how to best protect yourself against modern banking fraud & how MeridianLink Marketplace can be a solution to address them. Opinions expressed in this article are of the individual authors and may not reflect the opinions of MeridianLink, Inc.  

As technology continues to advance, so does fraud. If left unchecked, these increasingly sophisticated fraud tactics can erode trust, undermine financial stability, and inflict substantial losses on your institution and consumers. 

But no need to panic — with an understanding of what to look out for and the right solutions by your side, you can safeguard your assets and preserve consumer loyalty with confidence! 

Here are some modern fraud tactics financial institutions often encounter: 

First-Party Fraud 

Occurs when an individual intentionally misrepresents their identity or falsifies information for financial or material gain.  

It’s often mistaken as credit risk, in which an individual is unable to pay debt during a loan’s lifecycle. Unlike credit risks, those committing first-party fraud enter loans with no intention of ever repaying them from the start. Examples include: 

• Fronting: Using another person’s name to lower service costs. 

• Address Fronting: Using a different home address to lower service costs. 

• Chargeback Fraud: Denying card purchases to receive a refund.  

Second-Party Fraud 

Occurs when an individual knowingly gives their personal information to another person to commit fraud. Money muling is a common type of second-party fraud in which an individual allows another person to transfer money in and out of their bank account for a small fee, often to negative ends such as criminal activity or money laundering. 

Third-Party Fraud 

Also known as identity theft and occurs when an individual’s personal information is stolen and used to gain credit or products (access funds, open credit accounts, etc.). It can be easily traced by verifying applicant information through checks with credit bureaus and other sources. Both the financial institution and the individual whose identity was stolen are victims in these scenarios. 

Account Takeover (ATO) 

Occurs when an individual gains unauthorized access to a person’s account with the intent to commit fraud. This is not the same as third-party fraud, in which the criminal uses the victim’s personal information to assume their identity for fraudulent reasons. 

Synthetic Identity Fraud 

Occurs when fabricated credentials are used to create identities that are not associated with a real person. Partially valid credentials, such as a real social security number with a fake name and date of birth, may also be used in creating these synthetic identities. 

MeridianLink Marketplace: Trusted Partners in an Evolving Fraud Landscape 

MeridianLink Marketplace connects MeridianLink^® customers with trusted third-party fraud and data security solutions to support your operations. 

Having the right tools to tackle fraud is crucial to maintaining consumer trust and portfolio growth. Browse the marketplace to see which MeridianLink-compatible solutions may be right for your institution’s fraud mitigation needs. 

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