Early Warning Launches Proactive Solution to Combat Tax Refund Fraud

Scottsdale, AZ


New service stops tax refund fraud by validating account status and ownership. Early Warning, a leader in fraud prevention and risk management, today announced that its Account Owner Authentication (AOA) for Government solution suite is now available to help prevent the growing instances of tax refund fraud.

Officials project that tax refund identity fraud, whereby criminals file bogus tax returns in the name of unsuspecting taxpayers and route the direct-deposit refunds to their own accounts, will cost taxpayers more than $21 billion over the next five years. Further, fiscal year 2013 had a 66 percent increase over 2012 in the number of identity theft related criminal investigations initiated by the Internal Revenue Service for refund fraud. As a result, state and federal tax agencies are under increased pressure to find reliable methods to confirm taxpayer identities and deposit account information listed on filed tax returns do, in fact, match.

Early Warning's AOA for Government solution provides state and federal tax agencies with proactive, real-time insight capable of distinguishing genuine taxpayers from fraudsters. The company's National Shared Database℠ Resource is the industry's most current and accurate cross-industry resource. The database is leveraged by the AOA for Government solution suite to:

  • Quickly validate a deposit account's existence;
  • Assess the risk associated with processing the refund;
  • Report whether the payees' name, address, Social Security number and other elements match the account in real-time; and
  • Confirm that the payee is the authorized owner or signor of the account.

Validating an individual's identity and account status on the frontend is essential to reducing improper payments. Tax agencies can use the AOA for Government services to verify identity information from tax return filings with the identity information of the bank account and determine if there is a match before issuing the refund.

"The biggest challenges tax agencies face in fighting tax refund fraud are resource issues and reliable technology needed to spot fraud," said David Barnhardt, Early Warning's vice president of Product Management. "However, the AOA for Government solution suite helps tax agencies quickly determine if a tax refund is legitimate, therefore preventing the issuance of refunds to identity thieves and fraudsters."

Mobile Number Verification is part of a suite of solutions from Early Warning that provide visibility across mobile networks to changes occurring across mobile accounts,devices and phone numbers to strengthen mobile and online authentication and improve the customer experience.

About Early Warning
Early Warning provides innovative risk management solutions to a diverse network of 900 financial institutions, government entities and payment companies, enabling businesses and consumers to transact with safety, speed, and convenience. Owned and governed by five of the largest banks in the United States, this unique business model facilitates a data exchange system based on collaborative intelligence and trusted exchange. For more information please visit www.earlywarning.com.