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While Socure’s industry-leading solutions are best known for countering fraud at digital account opening, many top enterprises are also deploying our Sigma Identity solutions at various touchpoints throughout the customer lifecycle. Notably, one leading institutional investment brokerage stopped fraudsters with pre-arranged trading fraud by using Socure RiskScores.

Deploying Innovative Identity Fraud Solutions to Prevent Criminal Activity

Institutional investing firms need to be vigilant about different kinds of fraud from account opening onwards. Identity fraud is sometimes perpetrated by individuals but, more often, it is executed by highly-coordinated, organized groups of professional criminals colluding to form a fraud ring. As a market maker, the firm needed to be vigilant about illegal pre-arranged trading fraud where perpetrators collusively exchanging securities among each other in an effort to drive prices up or down. Fraud rings execute trades and quickly attempt to siphon off illegal proceeds.

After identifying illegal trading fraud behavior, the institution found an innovative approach to block it with Socure Phone RiskScores. Fraudsters were attempting to channel their illegal proceeds to another financial institution. The firm had multiple layers of security to identify and stop transactions and Socure Phone RiskScore is an integral part of that stack. Socure enabled the firm to identify dubious transfer destinations and prevent fund transfers.

How Pre-Arranged Trading Fraud was Stopped Using Socure Phone RiskScore

Socure Phone RiskScore provides focused risk and correlation checks to mitigate fraud on new and existing users based on phone signals for opening and managing digital accounts. The phone number linked with a user’s name is evaluated against Socure’s proprietary data, which is based on prior history and patterns using advanced analytics. Socure Phone RiskScore provides risk and correlation information to address two key questions:

  1. Risk Score: How likely is the phone number to be associated with fraud?
  2. Correlation Score: How likely is the phone number associated with the user?

In this particular use case, Phone RiskScore provided a Correlation Score along with Reason Codes that explained the score. By establishing an appropriate Correlation Score threshold that indicated a phone number was not associated with a user and zeroing on Reason Codes associated with phone numbers associated with fraud (see Figure 1), the customer was able to control their risk and put an end to an episode of pre-arranged trading fraud.

How Socure Helps Brokerages Stop Pre-arranged Trading Fraud
                                                  Figure 1: Examples of Socure Phone RiskScore Reason Codes

Socure RiskScore products provide risk scores and correlation scores for phone, email, and address information. Socure RiskScores are flexible fraud-fighting tools that our 1,000+ top enterprises use to solve their fraud problems, from application fraud at account opening, to ensuring an online marketplace is fraud-free, and countering account takeover (ATO) attempts.

At Socure, we are proud that our fraud prevention solutions help organizations counter fraudsters and streamline their risk operations. Request a personalized demo to see how you can solve your application fraud problems while ensuring that your good customers get auto-approved.

Todd Thiemann
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Todd Thiemann

Todd Thiemann

Todd is Senior Director for Product Marketing at Socure, where he manages marketing for Socure’s Fraud suite of offerings. Prior to Socure, Todd worked in cybersecurity and identity at companies including Arctic Wolf Networks, Nok Nok Labs, Vormetric/Thales, and Trend Micro.