Skip to Content

Low Level Of Authentication Indicative Of ID Fraud

Low Level Of Authentication Indicative Of ID Fraud

Statement LOW LEVEL OF AUTHENTICATION INDICATIVE OF ID FRAUD is a message from Comenity when rejecting an application for a credit card for one of their retail business partners.

You perform an application for a credit card and you receive a rejection letter from the issuer with a typical text, as follows:

Based on information obtained from the credit-reporting agency, we are unable to approve your application at this time. Here are our reasons for declining your request:

  • Current address reported by recently opened trade only
  • High average credit limit or loan amounton revolving/real property trades or credit balance to limit ratio on revolving trades
  • Low level of authentication indicative of First Party Fraud
  • Low level of authentication indicative of ID Fraud

There are two possibilities for this rejection:

A fraudster intended to open an account under your name in the past

Statistically the least frequent of all the reasons. Contact the issuer, here is Comenity, and confirm it. I suggest you to contact their “Account Protection” office instead of a standard representative.

Request them to have the hard inquiries removed and ask them how many applications you have introduced in the last year.

As we usually recommend, address the three bureaus (Transunion, Equifax, and Experian) and freeze your credit reports. As this process is free, have them always frozen unless you request a credit card, a loan, or enter in certain business partnerships where the issuer, lender, or prospective partner requires to perform an inquiry on your credit.

Comenity pulls from Equifax, as we observe in practice.

You have made very frequent applications, inquiries, and hard pulls and the high velocity raised a temporary alert.

This is the most frequent case. Consumers have many hard pulls and inquiries within a year and the velocity of these activities raised the attention of the algorithm.

The solution is to have your credit frozen to avoid suspicion of fraud from financial institutions.

Check for inaccuracies with alternative reporting agencies such as Sagestream.

First Party Fraud Is Easily Detected

The law requires lenders to give you a reason for a denial of credit; but they aren’t required to give you a specific reason so many times they will give a generic reason that might not be applicable to your individual situation.  But this denial is clear that Comenity is thinking about “bust out” or “first party” fraud.

Bust out fraud, also known as sleeper fraud, is primarily a first-party fraud scheme. It occurs when a consumer applies for and uses credit under his or her own name, or uses a synthetic identity, to make transactions. The fraudster makes on-time payments to maintain a good account standing, with the intent of bouncing a final payment and abandoning the account.

During the process, the fraudster bills up a history of good behavior with on-time payments and low utilization. Over time, he or she obtains additional lines of credit and requests higher credit limits. Eventually, the fraudster uses all available credit and stops making payments. Overpayments with bad checks are often made in the final stage of the bust-out, temporarily inflating the credit limit and causing losses greater than the account credit limit.

Traditional third-party fraud entails some form of impersonation or stolen identity, whether through stolen card credentials or someone taking over your identity. At some point, many victims of third-party fraud become aware of the crime when unknown transactions appear on statements, or a debt collection agency attempts to collect money the victim does not owe.

In contrast, first-party fraud often masquerades as a credit risk problem; delinquent accounts are sent to collections for a progression of treatment. Unlike third-party fraud, the transactions are committed with accurate information and seemingly legitimate intentions. This makes it much more difficult for a fraud team to spot. In this way, first-party fraud can be eventually written off as uncollectible and is sometimes sold unknowingly to external collections agencies.

Behavioral Risk Score

Behavioral Risk Score is a feature that lets you determine the behavioral risk signals associated with the applicant profile. The score is calculated based on a variety of factors, such as IP address, device fingerprints, and analysis of the documents and photos provided by the applicant.

There are multiple checks that allow us to estimate the risk of fraud in relation to an applicant profile. Accordingly, the Behavioral Risk Score is based on a scale of 0 to 100, with 0 signifying no fraud risk and 100 signifying a very high risk of fraud.

Behavioral Risk Checks are as follows:

  • IP Location determines if the applicant is located where they say they are and if their IP address was ever engaged in malicious behavior. We also have the functionality for VPN usage detection. We increase the risk score for the applicants using VPN.
  • Applicant data cross-check compares information from various documents provided by the applicant to ensure that it matches.
  • Duplicate profiles references applicant profiles stored in the Sumsub database in order to detect fake accounts created with duplicated data.
  • Digital authenticity detects signs of forgery in images of uploaded documents.
  • Devices cross-check ensures that the verification is initiated from one device at a single location.

Comenity Bank Dispute Email Address

There are telephones and mail addresses now that are published some time ago since September 2022. To avoid confusion with their changes, please find their contact information here.

Is Comenity Bank Legit?

Yes, Comenity is a financial institution part of Bread Financial that issues credit cards and other financial services for companies, notably large retail business concerns.