Early warning: A crucial defence against identity theft, credit fraud

Early warning: A crucial defence against identity theft, credit fraud

ID365 aims to help users monitor and control any changes related to their personal identification information. It serves as an "early warning" system, empowering individuals to proactively safeguard their identities and assets, while also strengthening the defences of the entire financial and banking system against increasingly sophisticated fraud risks.

ID365, developed by the Vietnam Credit Information Joint Stock Company (PCB), is supposed to help customers detect early signs of fraudulent loan applications. — Photo PCB

The Vietnam Credit Information Joint Stock Company (PCB) has developed the ID365 solution, aimed at helping customers detect early signs of fraudulent loan applications.

When a financial institution affiliated with PCB conducts a credit inquiry for a loan in a customer’s name, the system automatically sends an email notification to the customer. This allows users to immediately verify the loan request and identify any fraudulent activity, helping them take swift action to protect their personal credit information.

In fact, the increasing frequency of personal data breaches is paving the way for more sophisticated forms of financial fraud, particularly identity theft to secure loans. Although warning signs, such as unusual credit inquiries or abnormal loan applications, are often present, most individuals fail to notice these red flags until their financial obligations have already been established, which can lead to serious consequences for their credit score and reputation.

Identity theft is becoming more prevalent as personal data leaks on a massive scale. According to the Vietnam Cyber Emergency Response Team (VNCERT) and cybersecurity authorities, numerous cases of illegal distribution of citizens' personal identification information have been discovered, with some involving hundreds of millions of credit records being sold on underground forums. This trend underscores the growing targeting of personal data by cybercriminals, significantly increasing the risk of identity theft for financial gain.

In developed financial markets, credit monitoring has become a vital tool for individuals to manage their finances. Whenever an inquiry or loan application is made, the system automatically sends an alert, allowing users to verify and address any issues immediately.

In Việt Nam, however, most consumers still lack such proactive tools. Recently, after banks adopted biometric matching solutions, the number of individual customers being scammed and losing money decreased by 59 per cent, and the number of individual accounts receiving fraudulent funds decreased by 52 per cent compared to before July 1, 2024. This highlights the effectiveness of active monitoring and exposes a critical gap: detecting fraud often only occurs after the damage has been done, leaving individuals in a passive position.

This gap becomes a "blind spot" that criminals can exploit. Financial security experts emphasise that the key factor is not just whether personal data has been leaked, but how quickly users can recognise and respond to suspicious activity. A timely alert can prevent a fraudulent loan from being disbursed, creating a protective "early warning" system for personal credit information against increasingly sophisticated fraud tactics.

In today’s digital age, many loan application processes and financial transactions are automated, making approval and disbursement faster than ever. However, this convenience also increases the likelihood of identity theft being used to facilitate fraudulent loans.

Therefore, ID365 aims to help users monitor and control any changes related to their personal identification information. It serves as an "early warning" system, empowering individuals to safeguard their identities and assets, while also strengthening the defences of the entire financial and banking system against increasingly sophisticated fraud risks. 

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