Credit Checks - Fraud Library

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The credit check technique is used to check a consumer’s identity by comparing information the consumer provided to what is stored on their credit report.

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Expensive, and not very practical for fraud prevention for most merchants...

The credit check technique is used to check a consumer’s identity by comparing information the consumer provided to what is stored on their credit report.

How Good Is It? 

This is an effective way to verify data a consumer is providing a merchant. In general the credit report can validate the phone number, address, name and credit card information provided. Merchants can also use it to verify age.

• Can be manipulated by a fraudster in cases of true identity theft

• Can be expensive to use for authentication

• These reports rely on input from agencies, banks and merchants and their data may not be completely up to date

• Typically requires the social security number (SSN), or the last four digits of it, to be provided

• Depending on the data a merchant accesses they may have further legal notification requirements in accordance with the Fair Credit  Reporting Act

Considerations When Implementing or Buying This Functionality   

 Most consumers are not going to want to give a merchant their SSN and credit card number.

• Can you get data without a SSN?

• Can it support data on international orders?

• What data elements do they require from a merchant?

• Can they tell you about recent changes to the data?

• Don’t ever store credit card and SSN information together unless proper security precautions have been put in place. If a merchant gets hacked and this information is compromised, it is going to hurt.

Estimated Costs – Moderate, typically a per-transaction fee

Alternative Solutions – Reverse lookups: phone and address, consumer authentication

Vendors –ACE, Al Habashi for Trading Credit Information Agency, AMA Research, AMB Information Ltd, ARGUS Information Services, Asnef, Assilea, Atlas Credit Marketing Services, Australian Corporate Reporting Pty. Ltd
Australian Mercantile Bureaux & Agency, AZ direct, Bank Wizard, Banque de France, Baycorp Advantage, bdf, BIK, BKR, Burgel, Business Credit USA, Call Credit, CCF, CDROM EURACD, CEG, Cerved, Chrome Car Guide, Club Informa, Coface, Columbus House, Compuscan, CPR Register, Credexim Corp, Credit Consulants JA, Credit du Nord, CreditInform, Creditors Protection Association, CreditReform, CRIF, D&B, DIL International, Dimensione SRL, DMS Worldwide, Elekora, Equifax, ESBCB, Experian, FactoFrance, Fidelitas, Finska, First American AVM, Frontline Business Information, Graydon, Iberinter, ICP, Incresa, InfoGreffe, Informa, Informes Servicosa, InFoScore, Internacional base Economica, Irish Credit Bureau Ltd, isn busniess services, JI International INC, Kemps mercantile Agency, KKB Kredi Kayit Burosu, KOB, Kreditinform, Kreller Business Informaion Group, KSV, KUTZ, Lexis Nexis, MECICO, MECOS, MODI, MOPE, National Fraud Database, NLR can Call, Reg Call, Ofincur, OWENS Online INC, Paynet, Predictivo, Prevental, Quick Address, RENCOM International, RKI Kredit Information,
SBFE, SCHIMMELPFENG, Schufa, Serasa SA, Sintesis SRL, Solventec, SOPAREC, SOPRES, SORENCO, SPC, Transunion, VIDINTEX, VIS, ZEK

How Does it Work? 

 As merchants are processing an order they will collect the required data elements from the consumer and will pass them to the credit bureau. Typically this information is sent through a real-time feed that hooks into their existing order processing or CRM application. Typically the credit bureaus will have different levels of service as to what type of information they will return back to a merchant. They could have verification-only checks, fraud score checks and true credit scores. Make sure the information provided by the service will meet the requirements for using them. Accessing a consumer’s credit history is a big deal, so make sure to get legal guidance about what information is being accessed and if there is any new reporting or notification requirements that will have to be put into place. 

How Do I Use the Results? 

The feed a merchant gets back from the credit bureau may come in one of two forms. The first one is where they simply provide the information on the consumer. For example the merchant provided a name and a SSN and the credit bureau provided the merchant with an address, phone number and credit card number.

Or a merchant will provide them with the name, SSN, address, phone and credit card and they pass back a pass/fail indicator for each data element. Depending on how their choice of credit bureau works, the merchant will have to code their systems to interpret these results. The merchant will have to determine the criteria for accepting or rejecting an order.

Building This In-House 

N/A

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