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FRM Part II · FRM Exam Part II · Case Study: Financial Crime and Fraud

A criminal obtains a customer's personal data and opens a new credit card account in that customer's name, then runs up charges and never repays. Which type of fraud is this?

This is application fraud through true-name identity theft. The criminal used a real customer's identity to open a new account without consent. Account takeover targets existing accounts, synthetic fraud mixes fabricated and real data, and bust-out involves the borrower's own identity.

  1. AAccount takeover fraud
  2. BSynthetic identity fraud
  3. CApplication fraud using true-name identity theftCorrect
  4. DFirst-party bust-out fraud

Explanation

The fraudster used a real person's identity to open a new account, which is application fraud via true-name identity theft. Account takeover involves an existing account, synthetic identity blends real and fake data, and bust-out is by the borrower using own identity.

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